Kyle Berry is using mean-per-unit estimation in the audit of Leonards inventory balances. Leonards inventory is recorded at $240,000 and comprises 1,200 different items. Berry determined a sample size of 120 items and performed the appropriate substantive procedures. Based on this sample, he determined the following:

Average audited value (per item)	$ 204
Standard deviation of audited values	$ 22

A summary of some additional parameters estimated by Berry follow:

Tolerable misstatement	$ 17,500
Expected misstatement	$ 7,500
Risk of incorrect acceptance	5	%
Risk of incorrect rejection	10	%

Required:

What is Berrys estimate of the audited value of Leonards inventory?

Calculate the precision and precision interval for Leonards inventory. Provide a brief description of the meaning of the precision interval.

What is Berrys conclusion with respect to Leonards inventory balance?

Using a risk of incorrect acceptance of (1) 1 percent and (2) 10 percent, calculate the precision and the precision interval for Leonards inventory.