Audit Sampling $-$ Part $1($February $2023)$

Student Problem

In the audit of Potomac Mills, the auditors wish to test the costs assigned to manufactured goods.

During the year, the company produced $2,000$ production lots with a total recorded cost of $$5,900,000.$

The auditors selected a sample of $200$ production lots with an aggregate book value of $$600,000$ and vouch the assigned costs to the supporting documentation.

Their audit discloses misstatements in cost and the total audited value of the sample is $$582,000.$

Required

Calculate the Auditor's estimate of the total cost of the production lots using the following:

Mean per unit

Ratio estimation

Difference estimation

There is no materiality listed so you are not required to prepare an opinion

Complete the following:

$\backslash$table$[[\backslash$table$[[$Potomac Mills Total$],[$Production Cost Balance$]]],[$POPULATION$,],[,$Universe$],[$s$,],[$$$,]]$

$\backslash$table$[[$SAMPLE$,],[$Sample $=,],[\backslash$table$[[,$Total,Average or Mean$],[$Book Value,,$],[$Audit value,,$]],,]]$