The specific cost identification method is more appropriate than a flow assumption method:

Question

Quizplus · Accepted Answer

The specific cost identification method is more appropriate for inventories with unique items because it allows for each item to be individually tracked and valued based on its specific cost. This is not necessary for a large inventory of identical low-priced items, as a flow assumption method such as First-In, First-Out (FIFO) or Average Cost can be used. Purchase cost fluctuations (rising or falling) do not necessarily affect the choice of cost identification method.

The Specific Cost Identification Method Is More Appropriate Than a Flow