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

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