How do I allocate the freight cost and duty cost to a specific inventory item so that my COGS will not be overstated as expense but as the cost of the inventory item?

The ability to handle landed costs is unavailable in QuickBooks Online, accounting-yaaas.

You can consider adding a portion of the freight and duty costs across each item’s total by creating a service item and adding it to a line item as a workaround.

Here are the steps:

1. Navigate the Gear icon in the upper right corner.
2. Select Products and services.
3. Click New, then select Service.
4. Fill out the required details.
5. Click Save and close.

For further guidelines, please see this page: Add inventory products in QuickBooks Online.

You can also check the details provided by Rustler in this guide link: Add cost to the inventory item for additional information.

Please note that before taking any action, it's best to consult an accountant to ensure it's right for your business. 

Alternatively, you can also explore an inventory management app with the landed cost allocation feature to integrate with QuickBooks and let you do the tasks.

To check for apps compatible with QBO:

1. Go to Apps.
2. Click Finds Apps.
3. Type "inventory management" in the Search for an app field.
4. If you have found the app, click Get App Now.

Moreover, check out these resources about inventory tracking and report status for future reference:

• Set up and track your inventory
• Use reports to see your sales and inventory status

If you require further assistance managing inventory items or other concerns, reply to this thread. I'm here to support you at any time.