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CoffeeBeans Co. used the perpetual inventory system. The company purchased \$10,000 of coffee beans (i.e., inventory) on account and paid \$350 shipping charges for the delivery of the product. Which of the following statement is correct?


The shipping cost is part of the product cost and is debited to the Inventory account.


The shipping cost is called "freight out".


The shipping cost is an operating expense.


The shipping cost reduces cost of goods sold.

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