Question

What is the subject of the question?

1) Income Statement
2) Profit and Loss
3) IS
4) P&L

Answer 1

The subject of the question is Profit and Loss (P&L) or Income Statement (IS). The firm's accounting profit can be calculated by subtracting total expenses from total revenue.

Step-by-step explanation:

The subject of the question is Profit and Loss (P&L) or Income Statement (IS). The question asks for the firm's accounting profit, which is a key concept in business and finance.

Step-by-step explanation:

1. Accounting profit is calculated by subtracting total expenses from total revenue. In this case, the firm had sales revenue of $1 million and spent $600,000 on labor, $150,000 on capital, and $200,000 on materials.
2. To find the accounting profit, subtract the total expenses from the total revenue: $1,000,000 - ($600,000 + $150,000 + $200,000) = $1,000,000 - $950,000 = $50,000.