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Northeastern Franchisers Ltd. has a number of clients that use their process for producing exotic Norwegian dinners for customers throughout New England. The operating cost for the franchise (W) has a fixed cost of $1,000 per week plus $5 for every unit produced. That is, if number of units produced in a week is X than W = 1000 + 5X. Recently several restaurant owners using the process complained that the cost model is no longer valid and, in fact, the weekly operating costs are higher. A sample of 25 restaurants gives sample mean weekly cost as Rs. 3,050/ Given that number of units produced in a week, X, has normal distribution with mean 600 and standard deviation 25.
a. Examine if there is strong evidence to support the claim of restaurant owners.
b. Construct a 95% confidence interval estimate of actual average weekly cost
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