Question

Q35 The first seven (7) customers of the day at a small donut shop have checks of $1.25, $2.36, $2.50, $2.15, $4.55, $1.10, and $0.95, respectively. Based on the number of customers served each day, the manager of the shop claims that the shop needs an average check of $1.75 per person to stay profitable. Given her contention, has the shop made a profit in serving the first seven customers? [2 Marks]

DO NOT WRITE THE ANSWER - USE WORD FORMAT.

Answer 1

Solution:

Ho:

Ha:

alpha=0.05

For the given sample

mean=2.122857

sample size,n=7

sample standard deviation=s=1.243245

Calculation of test statistic:

t=xbar-mu/s/sqrt(n)

=(2.122857-1.75)/(1.243245/sqrt(7)

t=0.7934774

degrees of freedom=n-1=7-1=6

p value is excel is

=T.DIST.2T(0.79649;6)

=0.456097556

=0.4561

p=0.4561

p>0.05

Fail to reject Ho.

Accept Ho.

There is sufficient evidence at 5% level of significance to conclude that  shop made a profit in serving the first seven customers