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.

1. Reject H₀ if t_calc < 1.711
2. Reject H₀ if t_calc > 1.711

 

multiple choice 1

• 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.

 

multiple choice 2

• True

• False

 

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

 

multiple choice 3

• True

• False

 

(b) Is this a close decision?

 

multiple choice 4

• Yes

• No