Auditing & Assurance Services with ACL Software Student CD-ROM
6th Edition
ISBN: 9781259197109
Author: Timothy J Louwers, Robert J. Ramsay Professor, David Sinason Associate Professor, Jerry R Strawser, Jay C. Thibodeau Associate Professor
Publisher: McGraw-Hill Education
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Question
Chapter G, Problem 67EP
a.
To determine
Compute the upper limit on misstatements, if risk of incorrect acceptance is 5%.
b.
To determine
Explain the meaning of the upper limit on misstatement using the information calculated in requirement (a).
c.
To determine
Calculate the upper limit on misstatements (Requirement (a)) using a risk of incorrect acceptance of 10 %.
d.
To determine
Explain the relationship between the acceptable level of the risk of incorrect acceptance and the upper limit on misstatement.
e.
To determine
Explain the advantage and disadvantage of establishing lower and higher acceptable levels of the risk of incorrect acceptance.
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Coastal Electronics manufactures portable speakers. Estimated sales (in units) are 32,000 in July, 36,000 in August, and 28,500 in September. Each unit is priced at $85. Coastal wants to have 35% of the following month's sales in ending inventory. That requirement was met on July 1. Each speaker requires 2 drivers and 6 feet of cabling. Drivers cost $8 each, and cabling is $0.75 per foot. Coastal wants to have 20% of the following month's production needs in ending raw materials inventory. On July 1, Coastal had 25,000 drivers and 72,000 feet of cabling in inventory. What is Coastal's expected sales revenue for August? Help
Chapter G Solutions
Auditing & Assurance Services with ACL Software Student CD-ROM
Ch. G - Prob. 1RCCh. G - Prob. 2RCCh. G - Prob. 3RCCh. G - Prob. 4RCCh. G - Prob. 5RCCh. G - Prob. 6RCCh. G - Prob. 7RCCh. G - Prob. 8RCCh. G - Prob. 9RCCh. G - Prob. 10RC
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