Hello George Lang, the landed cost functionality works exactly as you describe. Next, I am going to present you a checklist so that you can evaluate if you made all the correct configurations:

1- Activate "Landed cost" in Inventory setting.

2- Create the product related to the landed cost and set:

• Product type: Service
• Can be purchase (Marked)
• Is a landed cost (Marked)
• Default Split Method (If you leave it empty, you can select it at the time of purchase)

3- In the landed cost product category, set:

• Inventory Valuation: Automated
• Set stock accounts
  

4- In the category of products that the delivery value is added, set:

• Costing Method: FIFO/AVCO
• Inventory Valuation: Automated

5- In the purchase process

• Create and confirm a purchase order with the products
• Create receipt and validate
• Create vendor bill, add the landed cost, validate vender bill
• Create landed cost. This button will appear when you add the product landed cost in the vendor bill lines. You must ensure that the landed cost product is well configured.
• Edit landed cost: Select the transfers (receipts) and change the Split Method, if necessary. Validate landed cost.

I hope it works for you.
Kind regards