A company has sales of $695,000 and cost of goods sold of $278,000. Its gross profit equals

Gross profit = $417,000

Explanation:

Gross profit is the excess of the sales revenue over and above the cost of goods sold. It shows how profitable a business is by managing well the cost of inputs that can be directly related to the goods sold ...

If the gross profit is falling over time it indicates the business is losing control over the cost of its input

Gross profit = Sales revenue - cost of goods sold.

The gross profit = 695,000 - 278,000

= $417,000