Rachel Robertson wishes to use mean-per-unit sampling to evaluate the reasonableness of the book value of the accounts receivable of Smith, Inc. Smith has 8,500 receivable accounts with a total book value of $1,505,000. Robertson estimates the population's standard deviation to be equal to $22. After examining the overall audit plan, the auditors believe that the account's tolerable misstatement is $66,000, and that a risk of incorrect rejection of 1 percent and a risk of incorrect acceptance of 5 percent are appropriate.( Risk of incorrect rejection of 1%=2.58, Risk of incorrect acceptance of 5%=1.64)

a.Calculate the required sample size.

1.Calculate the point estimate of the account's audited value.

2.Calculate the projected misstatement for the population.

3.Calculate the adjusted allowance for sampling risk.