Using the difference estimation technique, estimated total audited value of the population is:
A) $100,000.
B) $120,000.
C) $140,000.
D) $144,000.

Question

Quizplus · Accepted Answer

Since the audited sample value is $24,000 and the sample size is 20, we can estimate the average audited value in the population as:

$24,000 / 20 = $1,200

Using the difference estimation technique, we can estimate the difference between the average audited value and the average unaudited value in the population as:

$1,200 - $800 = $400

Multiplying this difference by the unaudited sample size of 100 gives us an estimated total difference of $40,000. Adding this to the total value of the unaudited sample of $100,000 gives us an estimated total audited value of:

$100,000 + $40,000 = $140,000

Therefore, the best choice is (C).

Using the Difference Estimation Technique, Estimated Total Audited Value of the Population