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?

i) Yes

ii) No