Asked by Tempest Hansen on Jun 15, 2024
Verified
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.
Verified Answer
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.
Learning Objectives
- Determine the constituents and calculation method for the cost of goods sold.