What is the formula for mean per unit estimation in auditing?

The formula for mean per unit estimation in auditing is indeed the average of selected items multiplied by the population size. This method is useful when auditors want to estimate the total population amount based on a sample.

When using mean per unit estimation, the auditor first calculates the average value of the items in the sample. This average is then extrapolated to estimate the total for the entire population. The idea is that the average discovered in the sample can be used to make an informed prediction about the average of the entire population, leading to an estimate of total amounts.

This approach assumes that the sample is representative of the population, which is crucial for the accuracy of the calculation. By multiplying the average of the selected items by the total number of items in the population, auditors can arrive at a means of estimating what the total would be if the full population were examined. This technique is particularly useful when assessing larger groups where examining every item would be impractical.

The other options do not reflect the correct approach for mean per unit estimation. They involve different calculations that are not specifically related to estimating the average value across a population based on a sample.