N.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 value of $30,000.If the entire inventory contained 2,400 items and the total recorded value 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 estimated account balance using mean-per-unit estimation can be calculated using the formula:
Estimated account balance = (sample audited value / sample size) * population size

Using the values given in the question:
- Sample audited value = $24,600 
- Sample size = 120 
- Population size = 2,400

Therefore, 
Estimated account balance = (24,600 / 120) * 2,400 
= $492,000

Therefore, the correct answer is choice D, with an estimated account balance of $492,000.

NGreen,CPA,performed a Mean Per Unit Sampling Plan to Examine the Inventory