The allocation problem in inventory arises when unit costs

$$

$$

over time. The issue involves the identification of

$$

$$

only the units remaining in ending inventory

only the units sold

units remaining in ending inventory and units sold

and allocating a unit cost to these units. If unit costs

$$

$$

are constant

change

over$$ time, there is

$$

$$

an

no

allocation problem because all units are valued at the same

cost$,$

making it

$$

$$

necessary

unnecessary

to track units sold versus units remaining in ending inventory.