I have a deal under LOI in a manufacturing business. The financials for this business is a gross profit that only takes into account materials. Labor is captured in SGA. How should a manufacturing business under GAAP better represent this? The two things that come to mind is FOB destination sales and inventory costing as how these are accounted for can have a material impact on the normalized gross profit margin. Any help or guidance in this area would be greatly appreciated especially from technical professions in this space.
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