Final answer:
The firm's accounting profit is calculated by subtracting total costs ($950,000: labor, capital, and materials) from the sales revenue of $1 million, resulting in an accounting profit of $50,000.
Step-by-step explanation:
To calculate the firm's accounting profit, we subtract the total costs from the sales revenue. The total costs includes expenses on labor, capital, and materials.
Calculation of Accounting Profit
- Sales Revenue: $1,000,000
- Labor Costs: $600,000
- Capital Costs: $150,000
- Material Costs: $200,000
- Total Costs: Labor + Capital + Materials = $600,000 + $150,000 + $200,000 = $950,000
- Accounting Profit: Sales Revenue - Total Costs = $1,000,000 - $950,000 = $50,000
The firm's accounting profit for last year was $50,000.