Some accounting firms give the client an option to pay a fee when the tax return

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 S710. To determine if this cost has changed, the firm randomly samples 32 client audit fees. The sample mean audit cost was $680 with a standard deviation of $65. Complete parts a through c below

Explanation / Answer

b) The interval doesn't contain 730. Hence,

We reject the null hypothesis that mean audit cost is $730. The data from the sample of client audit fees provides sufficient evidence that the mean audit cost is now different.

c) Option B is correct.

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