Question

Larned Corporation recorded the following transactions for the just completed month.

a) Financial statements
b) Market analysis
c) Employee benefits
d) Sales projections

Answer 1

The firm's accounting profit can be calculated by subtracting all expenses from the revenue.

Step-by-step explanation:

Accounting profit is calculated by subtracting all expenses, including labor, capital, and materials, from the 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. Therefore, the accounting profit can be calculated as follows:

Revenue - (Labor + Capital + Materials) = Accounting Profit
$1,000,000 - ($600,000 + $150,000 + $200,000) = Accounting Profit
$1,000,000 - $950,000 = Accounting Profit
Accounting Profit = $50,000