Question 147463: an auditor reviewed 25 oral surgery insurance claims form a particular surgical office, determining that the mean out-of-pocket patient billing above the reimbused amount was $275.66 with a standard deviation of $78.11. (a) 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? State your hypotheses and decision rule. (b) Is this a close decision?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! an auditor reviewed 25 oral surgery insurance claims form a particular surgical office, determining that the mean out-of-pocket patient billing above the reimbused amount was $275.66 with a standard deviation of $78.11.
(a) 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? State your hypotheses and decision rule.
Ho: u = 250
Ha: u is not equal to 250
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I ran a T-test and got the following:
Test Statistic: t = 1.64255...
p-value = 0.1135
Conclusion: Since p-value is greater than 5%, fail to reject Ho.
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(b) Is this a close decision?
No since p-value is considerably larger than 5%.
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Cheers,
Stan H.
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