Final answer:
A custom home builder is the type of company most suited for specific identification because each home has unique costs, while other listed businesses have more uniform products. Specific identification allows for precise tracking of individual item costs in scenarios with non-interchangeable goods.
Step-by-step explanation:
The company more likely to use specific identification to value its inventory and cost of goods sold is the custom home builder. Specific identification is an inventory valuation method best suited for businesses with unique, non-interchangeable products. This approach tracks the actual cost of each specific item. In the case of a custom home builder, each home is unique and has individual costs associated with its construction, making this method practical and accurate for reflecting the true cost of goods sold.
Meanwhile, businesses with homogeneous products like a fast food restaurant, a dog biscuit manufacturer, or a bulk candy merchandiser, generally prefer using other methods such as first-in, first-out (FIFO) or weighted average because their products are more uniform and interchangeable, making specific identification less efficient and more cumbersome for inventory tracking.
Specific identification is vital for businesses where each product sale has significantly different costs, which includes custom-made products or items with distinctive identifiers like serial numbers.