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

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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.

The Specific Identification Method of Inventory Valuation Is Desirable When