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Q1) Faced with rising fax costs, firm issued a guideline that transmissions of 10 pages or more must be sent by 2-day mail instead. Exceptions are permitted, but they wish average to be 10 or below. Firm examined 35 randomly selected fax transmissions during next year, yielding a sample mean of 14.44 with standard deviation of 4.45 pages.
Question 1:
At.01 level of significance, is true mean greater than 10?
i) Yes
ii) No
Q2) Auditor reviewed 25 oral surgery insurance claims from particular surgical office, determining that mean out-of-pocket patient billing above reimbursed amount was $275.66 with standard deviation of $78.11. Mention your hypotheses and decision rule.
i)
At 5 % level of significance, does this sample prove violation of the guideline that average patient muts pay no more than $250 out-of-pocket?
a) To test: H0: μ ≤ $250 versus H1: μ > $250.
b) Compute the t value.
c) Null hypothesis must be rejected.
True
False
ii)
Is this a close decision?
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