King,

I think you need to look at your math. On a $1M sale @ 35% GP the GP is $350K not $350. A pretty significant difference. The way the companies I have worked for determines GP is pretty simple:

Sale price - (S,G,& A (overhead incl. labor) + Cost of Goods) = Net profit. GP is generally figured by Sale Price - Cost of Goods. My belief is that is a pretty accurate way of determining cost which is a key component in determining profit. Obviously it is difficult to measure on each individual product or sale, but it works pretty well on a monthly, quarterly, or yearly basis.

I would agree with Grandpa, Net Profit is by far the more important figure. Other than the fact that as a salesperson, my commission is based upon the GP.