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 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

Explanation / Answer

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

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