USA Cost of Goods Sold 1125-A for Service Company

[lmh0613]

If an 1120S corp specializes in remodeling, mostly uses subs and provides labor but also purchases materials that go into the remodel, what is the most technically correct way to record their expenses - cost of goods sold or simply deductions from income? Is this a purely service based business or does the purchase of materials require them to complete CGS? Technically their product is the service of remodeling and they never carry inventory..thanks for any input!