Final answer:
The accounting profit of the firm can be calculated by subtracting the total expenses from the sales revenue. With a sales revenue of $1 million and expenses totaling $950,000 (including labor, capital, and materials), the firm's accounting profit was $50,000.
Step-by-step explanation:
The question asks about the amount of materials purchased on account, but there isn't sufficient information provided to determine an exact amount. To calculate the accounting profit, you would deduct the total expenses from the sales revenue. Given the information that the firm had sales revenue of $1 million last year and it spent $600,000 on labor, $150,000 on capital, and $200,000 on materials, we can calculate the accounting profit.
The accounting profit is calculated as follows:
- Sales Revenue: $1,000,000
- Total Expenses: ($600,000 labor) + ($150,000 capital) + ($200,000 materials) = $950,000
- Accounting Profit: $1,000,000 - $950,000 = $50,000
Therefore, the firm's accounting profit was $50,000.