What is the Identified Cost Method primarily used for?

The Identified Cost Method is primarily used for tagging stock items for identification. This method allows a business to assign a unique cost to each specific item of inventory that it holds. When an item is sold, the actual cost of that specific item is recorded in the accounting records, allowing for precise tracking of costs and profits associated with each individual stock item.

This approach is particularly beneficial for businesses that deal with high-value or unique items, where it is crucial to know the exact cost of each item sold. By tagging stock items for identification, businesses can maintain accurate financial records and better manage their inventory.

The other options do not accurately reflect the primary use of the Identified Cost Method. Tracking cash flow refers to monitoring the inflow and outflow of cash resources, while identifying high turnover stock pertains to recognizing items that sell quickly, which may not require specific cost identification. Implementing fixed stock levels involves managing inventory to maintain a predetermined amount of stock on hand, rather than focusing on the individual costs associated with specific items.