Jeter,CPA,performed a Nonstatistical Sampling Plan to Examine the Inventory Balances

Multiple Choice

Jeter,CPA,performed a nonstatistical sampling plan to examine the inventory balances of Big Apple Company and estimated the account balance based on the ratio of audited value to recorded balances.He audited 200 items from a sample and found an audited value of $36,000.The sample had a recorded balance of $40,000.If the entire inventory contained 3,000 items and the total recorded balance of the inventory was $500,000,the estimated account balance using nonstatistical estimation and projecting the error based on number of items examined is:

A) $393,600.
B) $474,500.
C) $450,000.
D) $540,000.