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Other questions
Posting the bulk fabric purchase to COGS is fine
make your item and create a service item for it, link it to income or product sales income, or ... what you name the income account is immaterial just insure it is an income type
By posting to cogs when you purchase you are not using inventory items, and for your business model that is the best way to do it. An assembly item would not work for this either, assembly items are finite, and in sewing there is always drops, excess, miscuts, etc