Population
- $\quad$ Size $= 10,000$ items
- Book value $= \$ 8,000,000$
- Tolerable misstatement $= \$ 300,000$
Sample
- $\quad$ Size $= 100$ items.
- Average book value of sample items $= \$ 795$
- Allowance for sampling risk $= \$ 220,000$
- Projected misstatement $= \$ 100,000$ overstatement
-The "high" end of the confidence interval around the projected misstatement is equal to an overstatement of:
A)$120,000.
B)$300,000.
C)$320,000.
D)$620,000.

Question

Quizplus · Accepted Answer

Since the "high" end of the confidence interval is equal to the projected misstatement plus the margin of error, we can calculate it as follows:

Projected misstatement + (t-value * standard error)

= $200,000 + (2.23 * $60,000)

= $334,800

Therefore, the overstatement is equal to the "high" end of the confidence interval minus the projected misstatement:

$334,800 - $14,800 = $320,000

Thus, the correct answer is C.

Population - \quad Size =10,000= 10,000=10,000 Items - Book Value =$8,000,000= \$ 8,000,000=$8,000,000

Population
- $\quad$ Size $= 10,000$ Items
- Book Value $= \$ 8,000,000$