Asked by Tempest Hansen on Jun 15, 2024

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Freight-in:

A) adds to the Cost of Goods Sold.
B) reduces the Cost of Goods Sold.
C) does not affect Cost of Goods Sold.
D) increases operating expenses.

Freight-in

The cost associated with transporting goods or inventory to a company, which is often included as part of the inventory cost.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including both raw materials and labor costs.

Operating Expenses

Expenses incurred during the normal operation of a business, not including the cost of goods sold.

  • Determine the constituents and calculation method for the cost of goods sold.
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MF
Maria FloresJun 20, 2024
Final Answer :
A
Explanation :
Freight-in costs are considered part of the cost of purchasing inventory, and therefore, they increase the Cost of Goods Sold (COGS) by increasing the cost basis of the inventory.