You are planning to use monetary unit sampling (MUS) to evaluate Violet Company’s accounts...

You are planning to use monetary unit sampling (MUS) to evaluate Violet Company’s accounts receivable. The accounts receivable account totals $3,000,000. You have assessed a risk of incorrect acceptance of 5 percent, a tolerable misstatement of $120,000, and an expected error of $24,000.

a. Calculate the sample size and sampling interval.

b. Regardless of your answer to (a), use a sample size of 125 and the related sampling interval and calculate the upper limit on misstatement, assuming that you found the following differences.