Advertising expenses are a significant component of the cost of goods sold. List

Question

Advertising expenses are a significant component of the cost of goods sold. Listed below is a frequency distribution showing the advertising expenditures for 78 manufacturing companies located in the Southwest. The mean expense is $49.87 million and the standard deviation is $11.68 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 8   35 up to 45 20   45 up to 55 24   55 up to 65 17   65 up to 75 9 Total 78

Explanation / Answer

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Advertising Expense    Number ($ Million) of Companies(O) O - E (O-E)2 (O-E)2/E   25 up to 35 8 -7.6 57.76 3.702564   35 up to 45 20 4.4 19.36 1.241026   45 up to 55 24 8.4 70.56 4.523077   55 up to 65 17 1.4 1.96 0.125641   65 up to 75 9 -6.6 43.56 2.792308 Total 78 Chi-Square = 12.38 E (Mean) 15.6

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