If you have the 1968 FSM, the procedure for setting the pinion depth is described in detail. Unfortunately the factory procedure requires the factory pinion depth setting tool kit. I have that kit and after using it to set the depth on many rears, I have found that the pinion gear shim required has never been more than one or two thousandths of an inch different from the original factory shim. We feel that is because the machining operation on the gear is much more controllable while the machining operation on the carrier side gears is a lot harder due to being inside the case. The side carrier shims are much thicker and cover a larger range. So with the factory kit there is no actual 'depth' spec. The kit uses precision machined parts to be placed where the side bearings sit, and a shaft that is specific to each model rear is inserted and a dial indicator tests to see how much different from 'nominal' the gear depth actually is. Some gears are stamped with a + or - and a number to indicate how much must be added or subtracted due to machining tolerances.
There are aftermarket depth tools that work in a similar fashion but I have no experience with those. No matter what tool you use, an old pinon bearing that has been sanded slightly to allow a slip fit will make shim changes much easier.
If you re-use the factory pinion shim, you will probably be in the proper range. Then set the pinion gear pre-load, the side gear pre-load, and the backlash. Do a tooth contact pattern test and see if anything needs to be changed. If the factory pinion shim is damaged, try to get a measurement at an undamaged spot. If all else fails, install a random shim and do a tooth contact test to see how much off it is.
As you can see, setting up a rear is not easy and requires some specialized tools. Get a factory manual and read it until you understand the concept. I guarantee you will get a headache reading the section on setting up a rear. But it is the only way to do it so it will run quiet and smooth and last a long time.
