Assume that Parker Fran has calculated a sampling interval for Tide Incorporated$$s inventory of $$10,000$ and has conducted an examination of a sample of inventory balances. Fran has identified the following three misstatements:

$($Use Exhibit F$.$A$\mathrm{.}2.)$

Item Number Recorded Balance Audited Value

X$-21$ $$3,000$ $$1,200$

Z$-24550440$

AA$-026,0001,500$

Required:

Calculate the upper limit on misstatements for the following levels of the risk of incorrect acceptance. In general, what relationship do you observe between the risk of incorrect acceptance and the upper limit on misstatements?

Note: For all requirements, do not round intermediate calculations.

$5$ percent.

$10$ percent.