Question

Allied made its first and only purchase of inventory for the period on May 3 for 1,000 units at a price of 9 cash per unit (for a total cost of9,000). What was the total cost of the inventory purchased?

1) $9,000
2) $8,000
3) $10,000
4) $7,000

Answer 1

The total cost of the inventory purchased by Allied is found by multiplying the quantity of units by the price per unit, which results in a total cost of $9,000.

Step-by-step explanation:

To calculate the total cost of the inventory purchased by Allied, we will multiply the quantity of units purchased by the cash price per unit. In this case, Allied made a purchase of 1,000 units at a price of $9 per unit. Therefore, the total cost is calculated as follows:

Total Cost = Quantity of Units Purchased × Cash Price Per Unit

Total Cost = 1,000 units × $9/unit

Total Cost = $9,000

Thus, the correct answer to the total cost of the inventory purchased by Allied is option 1) $9,000.