Final answer:
An acceptable profit percentage varies by industry and strategy, but accounting profit is calculated as total revenue minus explicit costs. In the provided example, the firm's accounting profit is $50,000 from $1 million in sales, representing a 5% profit margin.
Step-by-step explanation:
What would be an acceptable percentage of sales receipts (total revenue) as profit for a company is a subjective question and can vary based on the industry, market conditions, and company strategy. However, for a company to determine its actual profit, it calculates its accounting profit, which is defined as total revenues minus explicit costs. Using the provided self-check question as an example, a firm with $1 million in sales revenue and expenses totaling $950,000 (which include $600,000 on labor, $150,000 on capital, and $200,000 on materials), would have an accounting profit of $50,000. This would represent a 5% profit margin as a percentage of sales receipts.