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A firm had sales revenue of $\$ 1$ million last year. It spent $\$ 600,00$ on labor, $\$ 150,000$ on capital and $\$ 200,000$ on materials. What was the firm's accounting profit?
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Accounting profit is the total revenue of a firm minus its explicit costs. Explicit costs are the actual out-of-pocket expenses for a firm, such as labor costs, capital costs, and material costs. Show more…
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A firm had sales revenue of $\$ 1$ million last year. It spent $\$ 600,000$ on labor, $\$ 150,000$ on capital and $\$ 200,000$ on materials. What was the firm's accounting profit?1.Accounting profit = total revenues minus explicit costs = $1,000,000 – ($600,000 + $150,000 + $200,000) = $50,000.
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