Landed Cost
Landed cost is total cost of receiving a product which includes, product cost, freight, and surcharges. The landed cost of a product is used in calculating your average cost.
For example, if two products were ordered and $60 in freight was charged to ship the product...
The $60 would be allocated proportionally to each line subtotal of the order subtotal.
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Line 1 - $100 / $600 = 16.67%
$60 x 16.67% = $10 freight for the line
$10 / qty of 10 = $1 add to the cost of each product
- Line 2 - $500 / $600 = 83.33%
$60 x 83.33% = $50 freight for the line
$50 / qty of 10 = $5 add to the cost of each product
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