Question

The specific identification method of costing inventories is used when the company sells large quantities of relatively low-cost homogeneous items. physical flow of units cannot be determined. company sells a limited quantity of high-unit cost items. company sells large quantities of relatively low-cost heterogeneous items.

Answer 1

company sells a limited quantity of high-unit cost items.

Step-by-step explanation:

A specific identification method can be defined as a method used for determining the ending inventories cost.

Basically, this type of method for costing inventories typically involves doing a well-detailed physical count of each goods bought on a specific date or a particular period of time, so as to determine the exact number of goods remaining by the end of the year's inventory. Therefore, each of the goods purchased are tagged with their unit price and any other additional charges.

Hence, the specific identification method of costing inventories is used when the company sells a limited quantity of high-unit cost items.