Final answer:
The accounting profit for the firm with $1 million in sales revenue and $950,000 in combined labor, capital, and material costs is $50,000.
Step-by-step explanation:
The accounting profit is calculated by subtracting all the explicit costs from the total sales revenue. In the scenario provided, the firm had sales revenue of $1 million last year and incurred costs for labor, capital, and materials amounting to $600,000, $150,000, and $200,000 respectively.
We calculate the firm's accounting profit by subtracting these costs from the sales revenue:
- Sales Revenue: $1,000,000
- Total Costs: Labor ($600,000) + Capital ($150,000) + Materials ($200,000) = $950,000
- Accounting Profit: Sales Revenue - Total Costs = $1,000,000 - $950,000 = $50,000
Therefore, the firm's accounting profit for last year was $50,000.