Green,CPA,performed a mean-per-unit sampling plan to examine the inventory balances of ABC Company.Green audited 120 items from a sample and found an audited value of $24,600.The sample had a recorded balance of $30,000.If the entire inventory contained 2,400 items and the total recorded balance of the inventory was $480,000,the estimated account balance using mean per unit estimation is:
A)$393,600.
B)$474,500.
C)$480,000.
D)$492,000.

Question

Quizplus · Accepted Answer

The mean-per-unit estimation formula is:

Estimated account balance = Total audited value / Total number of items audited x Total number of items in the inventory

Using the given values:

Estimated account balance = 24,600 / 120 x 2,400
Estimated account balance = $492,000

Therefore, the best choice is D: $492,000.

Green,CPA,performed a Mean-Per-Unit Sampling Plan to Examine the Inventory Balances