ECONOMICS

Detailed explanation-1: -Freight-in is part of the production process and will be capitalized into inventory and expensed through cost of goods sold when the product is sold. Freight-in is the cost incurred to ship finished goods to a distributor or retailer. Freight-out is considered a selling expense and is expensed when incurred.

Detailed explanation-2: -For typical accounting purposes, freight-in is added into the cost of goods, just as though the supplier charged a higher price.

Detailed explanation-3: -Freight out shipping costs have a direct relation to the number of goods you sell, so they’re categorized as a cost of goods sold. To record this, calculate your freight costs under the costs of goods sold section in your income statement.

Detailed explanation-4: -Distribution cost involves those expenses related to the transport of goods. Distribution costs may include the following: The movement of goods to resellers and customers. Transport fees and tolls.

Detailed explanation-5: -Selling expenses can include: Distribution costs such as logistics, shipping and insurance costs. Marketing costs such as advertising, website maintenance and spending on social media. Selling costs such as wages, commissions and out-of-pocket expenses.