Question

A cost accountant wished to establish the average amount, (no image) , spent by executives per day on travel and lodging. Then a comparison, between the average and the amount turned in to be reimbursed, will be made and unreasonably high or low expense amounts audited. A random sample of 50 executive expense receipts is taken. The average in the sample was $208, and the standard deviation was $29. The accountant prepares a 90-percent confidence level for (no image).
a. What is the confidence interval?
b. Interpret the confidence interval in part a.
c. How would the auditor use these data to determine if an audit should be conducted?

Answer 1

Answer:

Step-by-step explanation:

a) Find answer in the attachment below

b) Interpretation

• we are 90% sure that the interval contains the true population mean
• if a large number of samples in collected , and a confidence interval is created for each sample, 90% of these intervals were contained through mean.

c) this has not been clearly described in the question but basically , values too far away from mean will be deemed suspicious and will definitely be audited.