Question

In order to control costs, a company wishes to study the amount of money its sales force spends entertaining clients. The following is a random sample of six entertainment expenses (dinner costs for four people) from expense reports submitted by members of the sales force

	$	359			$	325			$	352			$	349			$	360			$	364

(a) Calculate x¯x¯ , s², and s for the expense data. (Round "Mean" and "Variances" to 2 decimal places and "Standard Deviation" to 3 decimal places.)

x¯x¯
s2
s

(b) Assuming that the distribution of entertainment expenses is approximately normally distributed, calculate estimates of tolerance intervals containing 68.26 percent, 95.44 percent, and 99.73 percent of all entertainment expenses by the sales force. (Round intermediate calculations and final answers to 2 decimals.)

[ x¯x¯ ± s]	[  ,  ]
[ x¯x¯ ± 2s]	[  ,  ]
[ x¯x¯ ± 3s]	[  ,  ]

(c) If a member of the sales force submits an entertainment expense (dinner cost for four) of $390, should this expense be considered unusually high (and possibly worthy of investigation by the company)? Explain your answer

• Yes

• No

(d) Compute and interpret the z-score for each of the six entertainment expenses. (Round z-score calculations to 2 decimal places. Negative amounts should be indicated by a minus sign.

z359
z325
z352
z349
z360
z364

Answer 1

(a)

(b)

(c) If a member of the sales force submits an entertainment expense (dinner cost for four) of $390, should this expense be considered unusually high (and possibly worthy of investigation by the company)? Explain your answer

Yes, because $390 is above the 2 standard deviations of the mean

(d)