Auditors at a bank randomly sample 100 withdrawal transactions made at ATM machines each day and use video records to verify that authorized users of the accounts made the transactions. The system records the amounts withdrawn. The average withdrawal is typically $50 with SD $40. Deposits are handled separately.

Determine if the statement below is true or false.

If the daily average withdrawal exceeds the upper control limit in the X-bar chart, then the procedure has committed a Type I error.

Group of answer choices

The statement is false because a Type I error has only been committed if the ATM machines are not shut down, given that the process is out of control.

The statement is true.

The statement is false because this is a Type II error.

The statement is false because a Type I error has only been committed if the ATM machines are shut down when the process is actually still in control.