a. Identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added.

Quality Control Activities	Activity Cost		Quality Cost Classification	Value-Added/ Non-Value-Added Classification
Billing error correction	$38,200		AppraisalExternal failureInternal failurePrevention	Non-value-addedValue-added
Cable signal testing	74,200		AppraisalExternal failureInternal failurePrevention	Non-value-addedValue-added
Reinstalling service (installed incorrectly the first time)	82,000		AppraisalExternal failureInternal failurePrevention	Non-value-addedValue-added
Repairing satellite equipment	15,900		AppraisalExternal failureInternal failurePrevention	Non-value-addedValue-added
Repairing underground cable connections to the customer	24,800		AppraisalExternal failureInternal failurePrevention	Non-value-addedValue-added
Replacing old technology cable with higher quality cable	104,600		AppraisalExternal failureInternal failurePrevention	Non-value-addedValue-added
Replacing old technology signal switches with higher quality switches	119,600		AppraisalExternal failureInternal failurePrevention	Non-value-addedValue-added
Responding to customer home repair requests	45,800		AppraisalExternal failureInternal failurePrevention	Non-value-addedValue-added
Training employees	24,900		AppraisalExternal failureInternal failurePrevention	Non-value-addedValue-added
Total activity cost	$530,000

Question Content Area

b. Prepare a cost of quality report. Assume that sales are $2,650,000. If required, round percentages to one decimal place.

blank Three Rivers Inc. Cost of Quality Report

Quality Cost Classification	Quality Cost	Percent of Total Quality Cost	Percent of Total Sales
Prevention	$fill in the blank e04b7efccfdb023_1	fill in the blank e04b7efccfdb023_2%	fill in the blank e04b7efccfdb023_3%
Appraisal	fill in the blank e04b7efccfdb023_4	fill in the blank e04b7efccfdb023_5%	fill in the blank e04b7efccfdb023_6%
Internal failure	fill in the blank e04b7efccfdb023_7	fill in the blank e04b7efccfdb023_8%	fill in the blank e04b7efccfdb023_9%
External failure	fill in the blank e04b7efccfdb023_10	fill in the blank e04b7efccfdb023_11%	fill in the blank e04b7efccfdb023_12%
Total	$fill in the blank e04b7efccfdb023_13	fill in the blank e04b7efccfdb023_14%	fill in the blank e04b7efccfdb023_15%

Question Content Area

c. Prepare a value-added/non-value-added analysis.

blank Three Rivers Inc. Value-Added/Non-Value-Added Activity Analysis

Category	Amount	Percent
Value-added	$fill in the blank 8f444101400aff3_1	fill in the blank 8f444101400aff3_2%
Non-value-added	fill in the blank 8f444101400aff3_3	fill in the blank 8f444101400aff3_4%
Total	$fill in the blank 8f444101400aff3_5	fill in the blank 8f444101400aff3_6%

Question Content Area

d. What percentage of total costs of quality are considered to be value-added?

47.0%14.0%61.0%None of these options are correct.