Homework SourseAdvertising expenses are a significant component of the cost
Advertising expenses are a significant component of the cost of goods sold. Listed below is a frequency distribution showing the advertising expenditures for 75 manufacturing companies located in the Southwest. The mean expense is $50.67 million and the standard deviation is $11.07 million. Is it reasonable to conclude the sample data are from a population that follows a normal probability distribution?
| Advertising Expense ($ Million) | Number of Companies | ||
| 25 up to 35 | 7 | ||
| 35 up to 45 | 14 | ||
| 45 up to 55 | 29 | ||
| 55 up to 65 | 17 | ||
| 65 up to 75 | 8 | ||
| Total | 75 | ||
Solution
We reject H0 if X2>13.2767, for given level of significance 0.01
We get the chi-square value as 17.2483
Hence we reject H0 under 0.99 confidence level
