12 water samples are taken (sample mean) ....In which step is the first error made? I say Step C?

If you're going to post long stats questions that require a lot of working out, you should show your working here so we can see what you've done and we can either say 'yes that's right' or 'no you did this bit wrong'; or else we have to work through the whole question and I doubt you'll find someone who'll do that, stats is quite dull.