I've been doing some testing, and I am confused by what I am seeing- so I am hoping that some kind NS soul can clarify for me.

I ran a pretty simple test- created an SO, then a PO, received the PO, fulfilled and invoiced the SO.  Straightforward. 

I was then looking at the Inventory Profitability report- specifically the 'Gross Profit' Fields.

The calculated GP was not reflecting what I expected - it had a very different number.  In my efforts to determine the difference, I found that the report is picking up the average (costing method in this database) purchase price for the item I tested with.  It appears to pick this up from the invoice gl COGS impact, not the amount I actually set in the PO.  (there weren't any items on hand so I brought them in with the PO)