Cost of Quality and Value$-$Added$/$Non$-$Value$-$Added Reports for a Service Company

Seven Seas Inc. provides cable TV and Internet service to the local community. The activities and activity costs of Seven Seas are identified.

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

b$.$ Prepare a cost of quality report. Assume that sales are $$2,350,000.$ If required, round percentages to one decimal place.

Seven Seas Inc.

Cost of Quality Report

c$.$ Prepare a value$-$added$/$non$-$value$-$added analysis. If required, round percentages to one decimal place.

Seven Seas Inc.

Value$-$Added$/$Non$-$Value$-$Added

Activity Analysis

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