Question

On its recent financial statements, Hassell Fine Foods reported the following information about net sales revenue and accounts receivable (amounts in thousands):

Answer 1

To calculate the firm's accounting profit, subtract the total expenses from the sales revenue. In this case, the accounting profit is $50,000.

Step-by-step explanation:

To calculate the firm's accounting profit, we need to subtract the total expenses from the sales revenue. In this case, the sales revenue is $1 million, and the total expenses are $600,000 (labor) + $150,000 (capital) + $200,000 (materials) = $950,000. Therefore, the accounting profit is $1,000,000 - $950,000 = $50,000.