WP 11.3C BILTRITE BICYCLES, INC.

Prepared by:
Monetary Unit Sampling Plan Date:
Factory Equipment Reviewed by:
Computed Precision and Upper Misstatement Limit Date:
December 31, 2009

Basic Precision $480,000

Incremental Allowance for Sampling Error

(1) (2) (3)

Ranked Incremental Incremental
Projected Reliability Allowance
$ Number Vendor Errors Factor-1 (1) x (2)
1778927 Gerald Equipment and Parts, Inc. $160,000 0.75 $120,000
6333750 Dorr's Machine Parts and Repairs $160,000 0.55 $88,000
12143770 Drexle Freight Handlers $160,000 0.46 $73,600
9873625 Johnson's Welding and Machining $57,238 0.40 $22,895
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Incremental Allowance for Sampling Risk $304,495
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Upper Misstatement Limit $3,720,833

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Audit Adjustment No. 1

5100 Cost of Goods Sold-Grand Prix Touring Bike $378,514

5200 Cost of Goods Sold-Phoenix Touring Bike $361,537
5300 Cost of Goods Sold-Pike's Peak Mountain Bike $984,346
5400 Cost of Goods Sold-Himalaya Mountain Bike $242,559
5500 Cost of Goods Sold-Waistliner Stationary Bike $536,103
1530 Factory Equipment $2,503,060
To adjust factory equipment and cost of goods sold accounts
for repairs erroneously debited to factory equipment.
The allocation is in proportion to the relative amounts
of cost of goods sold, as follows:

ACCOUNT AMOUNT
NUMBER (thousands) PERCENT
Cost of Goods Sold:
5100 $34,448 15%
5200 $32,903 14%
5300 $89,584 39%
5400 $22,075 10%
5500 $48,790 21%
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$227,800 100%
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NOTE TO INSTRUCTOR:
Inasmuch as overhead has been applied to inventories and
cost of sales for 2009, any audit adjustments affecting overhead