B.

Prepare a cost of quality report. Assume that sales are $2,000,000. Round percentages to one decimal place.*

C.

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

D.

Interpret the information in (B) and (C).

* Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Digital River Inc. provides cable TV and Internet service to the local community. The activities and activity costs of Digital Light are identified as follows:

1	Activities	Activity Cost
2	Billing error correction	$36,000.00
3	Cable signal testing	122,400.00
4	Reinstalling service (installed incorrectly the first time)	31,000.00
5	Repairing satellite equipment	40,800.00
6	Repairing underground cable connections to the customer	16,000.00
7	Replacing old technology cable with higher quality cable	164,000.00
8	Replacing old technology signal switches with higher quality switches	120,000.00
9	Responding to customer home repair requests	53,000.00
10	Training employees	96,800.00
11	Total	$680,000.00