Specific Identification

Hundreds of Cars, One RedThe specific identification method allocates the purchase costs to the item. This makes sense for businesses that deal with selling highly priced, low turnover items. An example will be a car dealership. Specific identification will not make sense for low priced, high turnover items. Imagine trying to allocate the specific cost of a dozen eggs every time it is purchased. The time and effort used to do this is not worth the benefit. However, when selling items like cars or gold, the extra effort used to maintain the purchase cost makes sense.