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Econe Dresses is a small company that manufactures women’s dresses for sale to specialty stores It has 1200 inventory items and the historical cost is recorded on a

 Econe Dresses is a small company that manufactures women’s dresses for sale to specialty stores. It has 1,200 inventory items, and the historical cost is recorded on a firstin, first-out (FIFO) basis. In the past, approximately 15% of the inventory items were incorrectly priced. However, any misstatements were usually not significant. A sample of 120 items was selected (see the file), and the historical costSample Number Historical Cost ($) Audited Value ($) Sample Number Historical Cost ($) Audited Value ($) 5 261 240 60 21 210 9 87 105 73 140 152 17 201 276 86 129 112 18 121 110 95 340 216 28 315 298 96 341 402 35 411 356 107 135 97 43 249 211 119 228 220 51 216 305 8.6 Confidence Interval Estimation and Ethical Issues Ethical issues related to the selection of samples and the inferences that accompany them can occur in several ways. The major ethical issue relates to whether confidence interval estimates are provided along with the point estimates. Providing a point estimate without also including the confidence interval limits (typically set at 95%), the sample size used, and an interpretation of the meaning of the confidence interval in terms that a person untrained in statistics can understand raises ethical issues. Failure to include a confidence interval estimate might mislead the user of the results into thinking that the point estimate is all that is needed to predict the population characteristic with certainty. When media outlets publicize the results of a political poll, they often overlook including this information. Sometimes, the results of a poll include the sampling error, but the sampling error is often presented in fine print or as an afterthought to the story being reported. A fully ethical presentation of poll results would give equal prominence to the confidence levels, sample size, sampling error, and confidence limits of the poll. 310 CHAPTER 8 Confidence Interval Estimation oof each item was compared with the audited value. The results indicated that 15 items differed in their historical costs and audited values. These values were as follows:

Jun 20 2020 View more View Less

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