Question

An auditor reviewed 25 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient billing above the reimbursed amount was $280.11 with a standard deviation of $77.78.

At the 5 percent level of significance, does this sample prove a violation of the guideline that the average patient should pay no more than $250 out-of-pocket?

(a-1)	H0: μ ≤ $250 versus H1: μ > $250. Choose the right option.

a.	Reject H0 if tcalc < 1.711
b.	Reject H0 if tcalc > 1.711

	a b

(a-2)

Calculate the test statistic. (Round your answer to 2 decimal places.)

Test statistic

(a-3)	The null hypothesis should be rejected.
	True False

(a-4)	The evidence does show that the average out-of-pocket expense is greater than $250.
	True False

(b)	Is this a close decision? Yes or No

Answer 1