The specific identification method of costing inventories is used when the

Question

Quizplus · Accepted Answer

The specific identification method is appropriate for companies that sell a limited quantity of high-unit cost items. This method involves identifying and tracking the cost of each individual item in inventory, which makes sense when dealing with high-value items. Option A is incorrect because in such cases, the specific identification method can be used to determine the physical flow of units. Options B and C are incorrect because the specific identification method is not practical for companies selling large quantities of items, especially if they are homogeneous or heterogeneous.

The Specific Identification Method of Costing Inventories Is Used When