Please show all work 613 Budget lapsing at army hospitals Bu

6.13 Budget lapsing at army hospitals. Budget lapsing occurs when unspent funds do not carry over from one bugeting period to the next. Refer to the Journal of Management Accounting Research (Vol. 19,2007) study on budget lapsing at US. Army hospitals, Exercise 2.111 (P.99). Because budget lapsing often leads to a spike in expenditures at the end of the fiscal year, the researchers recorded expenses per full-time equivalent employee for each in a sample of 1,751 army hospitals. The sample yielded the following summary statistics: x = $6,563 and s = $2,484. Estimate the mean expenses per full-time equivalent employee of all US. Army hopitals using a 90% confidence interval. Interpret the result. 6,663 + - 97.85

Solution

Mean =6563 : s =2,484. n = 1751

We have to calculate 90% confidence interval

STd error = 2484/rt 1751=59.37

Z score for 90% = 1.65, -1.65

Margin of error = + or - 1.65(se) = 97.96

Confidence interval 90% = (6465.04, 6660.96)