Final answer:
Freight-out is classified as a selling expense and not part of cost of goods sold. It is the cost related to the delivery of goods to the customer and is listed under SG&A expenses on the income statement.
Step-by-step explanation:
Freight-out is classified as a selling expense, not a component of cost of goods sold (COGS). Freight-out is not a cost of production; it is a cost associated with delivering the finished product to the customer. Unlike freight-in costs, which are considered part of the cost to get inventory ready for sale and thus included in COGS, freight-out is incurred after the sale is made and is linked to the selling function of the business.
Therefore, on the income statement, freight-out is listed under operating expenses in the selling, general, and administrative expenses (SG&A) category.