Asked by Carter Brown on Jul 22, 2024

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The specific identification method of inventory valuation is desirable when a company sells a large number of low-unit cost items.

Specific Identification Method

An inventory costing method where specific costs are attached to individual units of inventory, typically used for unique or high-value items.

Low-Unit Cost Items

Products or goods that have a relatively low cost per unit, making them inexpensive to purchase in large quantities.

Inventory Valuation

The method used to calculate the cost of goods sold and the ending inventory, factoring in purchases and any changes in costs or quantities.

  • Become familiar with the essentials and effects of diverse inventory costing methods such as LIFO, FIFO, and specific identification.
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Jevonne DesirJul 23, 2024
Final Answer :
False
Explanation :
The specific identification method of inventory valuation is most desirable when a company sells a small number of high-unit cost items, where it is feasible and practical to individually track and assign costs to each item sold. For companies with a large number of low-unit cost items, the cost of individually tracking and assigning costs can outweigh the benefits. Therefore, the FIFO or LIFO methods are typically used instead.