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Hypothesis testing of Mean: Microwave Repair Costs

Testing Claims,
(a) write the claim mathematically and identify Ho and Ha.
(b) find the critical value(s) and identify the rejection region(s).
(c) find the standardized test statistic.
(d) decide whether to reject or fail to reject the null hypothesis.
(e) interpret the decision in the context of the original claim.
For each claim, assume the population is normally distributed.
23. Microwave Repair Costs A microwave oven repairer says that the mean
repair cost for damaged microwave ovens is less than $100. You work for
the repairer and want to test this claim.You find that a random sample of
five microwave ovens has a mean repair cost of $75 and a standard deviation
of $12.50. At a = 0.01 do you have enough evidence to support the
repairer's claim? (Adapted from Consumer Reports)

Solution Summary

The solution provides step by step method for the calculation of test statistic for population mean. Formula for the calculation and Interpretations of the results are also included. Interactive excel sheet is included. The user can edit the inputs and obtain the complete results for a new set of data.

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