Question 134229
An auditor reviewed 25 oral surgery insurance claims from a particular surgical office, determining that the mean out-of-pocket patient billing above the remibursed amount was $275.66 with a standard deviation of $78.11.
(a) At the 5% 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: mu = 250
Ha: mu > 250
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Critical Value for 1-tail t-test with df=24 and alpha=5% = 1.711
Test statistic: t(275.66) = (275.66-250)/[78.11/sqrt(25)] 
= 25.66*5/78.11 = 1.6426
p-value = P(1.6425 < t < 10 with df=24) = 0.0568
Conclusion: Fail to reject Ho because p-value is greater than alpha= 5%.
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(b) Is this a close decision? 
Yes, because the p-value is very close to alpha = 5%
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Cheers,
Stan H.