Question

Some accounting firms give the client an option to pay a fee when the tax return is completed that guarantees tax advices and support from the accountant if the client were audited. A large accounting firm is trying to determine what fee to charge for next​ year's returns. In previous​ years, the actual mean cost to the firm for attending a client audit session was ​$730 To determine if this cost has​ changed, the firm randomly samples 35 client audit fees. The sample mean audit cost was ​$700 with a standard deviation of ​$75

​a) Develop a 90​% confidence interval estimate for the mean audit cost.

The 90% confidence interval for the mean audit cost is ($_,$_)

Round to the nearest dollar if needed

Answer 1

df = n - 1 = 35 - 1 = 34

t critical value at 0.10 significance level with 34 df = 1.691

90% confidence interval for is

- t * S / sqrt(n) < < + t * S / sqrt(n)

700 - 1.691 * 75 / sqrt(35) < < 700 + 1.691 * 75 / sqrt(35)

679 < < 721

90% CI is ( $679 , $721 )