The Specific Identification Method of Costing Inventories Is Used When

question 75

Multiple Choice

The specific identification method of costing inventories is used when the

• A) physical flow of units cannot be determined.
• B) company sells large quantities of relatively low cost homogeneous items.
• C) company sells large quantities of relatively low cost heterogeneous items.
• D) company sells a limited quantity of high-unit cost items.

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Definitions:

Short Run

The short run in economics is a time period during which at least one input, such as plant size, is fixed and cannot be changed by the firm.

Fixed Plant Capacity

The maximum output level that a plant can achieve with the current facilities and resources over a specific period.

Industry Entry

The act or process of beginning to compete in a new or existing market as a new participant.

Nonlabor Resources

Assets or materials used in production that do not involve human labor, such as machinery, raw materials, and buildings.