The cost method of inventory valuation is often used by retailers with big-ticket items and a limited number of sales per day.

Question

Quizplus · Accepted Answer

The cost method of inventory valuation is appropriate for retailers with high-priced items and slow turnover. It involves keeping track of the costs of each item in the inventory and valuing it at the cost paid for it, rather than at a market value. This method is suited to businesses that sell expensive items with low sales volumes because inventory turnover is slow, and market fluctuations are less likely to affect the value of individual items.

The Cost Method of Inventory Valuation Is Often Used by Retailers