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Please explain your answer. Up above i posted the table needed for the question. Figure 8-5. Just trying to understand how this is done. Thank
Please explain your answer. Up above i posted the table needed for the question. Figure 8-5. Just trying to understand how this is done. Thank you.
The firm of Le and Lysius was conducting the audit of Coomes Molding Corporation for the fiscal year ended October 31. Michelle Le, the partner in charge of the audit, decides that MUS is the appropriate sampling technique to use in order to audit Coomes's inventory account. The balance in the inventory at October 31 was $4,250,000. Michelle has established the following: risk of incorrect acceptance =5% (i.e., the desired confidence level of 95% ), tolerable misstatement =$212,500, and expected misstatement =$63,750. Required: a. Calculate the sample size and sampling interval using Table 8-5. Note: Use the tables, not IDEA, to solve for these problems. Round your interval answer to the nearest whole number. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \multirow{3}{*}{\begin{tabular}{l} TABLE 8-5 \\ Expected Population \\ Deviation Rate \end{tabular}} & \multicolumn{10}{|c|}{\begin{tabular}{c} Statistical Sample Sizes for Attribute Sampling-95 Percent Desired Confidence Level \\ (i.e., 5 Percent Risk of Incorrect Acceptance) \end{tabular}} \\ \hline & \multicolumn{10}{|c|}{ Tolerable Deviation Rate* } \\ \hline & 2% & 3% & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 15% \\ \hline 0.00% & 149(0) & 99(0) & 74(0) & 59(0) & 49(0) & 42(0) & 36(0) & 32(0) & 29(0) & 19(0) \\ \hline .25 & 236(1) & 157(1) & 117(1) & 93(1) & 78(1) & 66(1) & 58(1) & 51(1) & 46(1) & 30(1) \\ \hline .50 & & 157(1) & 117(1) & 93(1) & 78(1) & 66(1) & 58(1) & 51(1) & 46(1) & 30(1) \\ \hline .75 & & 208(2) & 117(1) & 93(1) & 78(1) & 66(1) & 58(1) & 51(1) & 46(1) & 30(1) \\ \hline 1.00 & & & 156(2) & 93(1) & 78(1) & 66(1) & 58(1) & 51(1) & 46(1) & 30(1) \\ \hline 1.25 & & & 156(2) & 124(2) & 78(1) & 66(1) & 58(1) & 51(1) & 46(1) & 30(1) \\ \hline 1.50 & & & 192(3) & 124(2) & 103(2) & 66(1) & 58(1) & 51(1) & 46(1) & 30(1) \\ \hline 1.75 & & & 227(4) & 153(3) & 103(2) & 88(2) & 77(2) & 51(1) & 46(1) & 30(1) \\ \hline 2.00 & & & & 181(4) & 127(3) & 88(2) & 77(2) & 68(2) & 46(1) & 30(1) \\ \hline 2.25 & & & & 208(5) & 127(3) & 88(2) & 77(2) & 68(2) & 61(2) & 30(1) \\ \hline 2.50 & & & & * & 150(4) & 109(3) & 77(2) & 68(2) & 61(2) & 30(1) \\ \hline 2.75 & & & & & 173(5) & 109(3) & 95(3) & 68(2) & 61(2) & 30(1) \\ \hline 3.00 & & & & & 195(6) & 129(4) & 95(3) & 84(3) & 61(2) & 30(1) \\ \hline 3.25 & & & * & * & & 148(5) & 112(4) & 84(3) & 61(2) & 30(1) \\ \hline 3.50 & & & & & & 167(6) & 112(4) & 84(3) & 76(3) & 40(2) \\ \hline 3.75 & & & & & & 185(7) & 129(5) & 100(4) & 76(3) & 40(2) \\ \hline 4.00 & & & * & * & & & 146(6) & 100(4) & 89(4) & 40(2) \\ \hline 5.00 & & & & & & & & 158(8) & 116(6) & 40(2) \\ \hline 6.00 & & & & & & & & & 179(11) & 50(3) \\ \hline 7.00 & & & & & & & & & & 68(5) \\ \hline \end{tabular} tolerable deviation rate is not exceededStep by Step Solution
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