Question: an auditor for a government agency is assigned the task of evaluating reimbursement for office visits to physicians paid by medicare. The audit is to be conducted for all medicare payments in a particular geographic area during a certain month. Suppose the audit is conducted on a sample of 75 of the reimbursements with the following results.

* in 12 of the office visits, an incorrect amount of reimbursement was provided.

* The amount of reimbursement was X bar = $93.70 S= $34.55

1. (i) given the above information, at the 0.05 level of significance, is there evidence that the mean reimbursement is less than $100?

(ii) is there any probability of type 1 error and if there is how much is it?

b) (I) at the 0.05 level of significance is there evidence that the proportion of incorrect reimbursement in the population is greater than 10%

(II) I there any probability of type II error and if there is how much is it?

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