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

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

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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 VA$/$NVA Classification

Billing error correction $$60,000$

Cable signal testing $140,000$

Reinstalling service $($installed incorrectly the first time$)40,000$

Repairing satellite equipment $50,000$

Repairing underground cable connections to the customer $25,000$

Replacing old technology cable with higher quality cable $175,000$

Replacing old technology signal switches with higher quality switches $150,000$

Responding to customer home repair requests $30,000$

Training employees $80,000$

Total activity cost $$750,000$

Question Content AreaThree 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 $8419$e$304$efc$305$b$\_1$ fill in the blank $8419$e$304$efc$305$b$\_2\%$ fill in the blank $8419$e$304$efc$305$b$\_3\%$

Appraisal fill in the blank $8419$e$304$efc$305$b$\_4$ fill in the blank $8419$e$304$efc$305$b$\_5\%$ fill in the blank $8419$e$304$efc$305$b$\_6\%$

Internal failure fill in the blank $8419$e$304$efc$305$b$\_7$ fill in the blank $8419$e$304$efc$305$b$\_8\%$ fill in the blank $8419$e$304$efc$305$b$\_9\%$

External failure fill in the blank $8419$e$304$efc$305$b$\_10$ fill in the blank $8419$e$304$efc$305$b$\_11\%$ fill in the blank $8419$e$304$efc$305$b$\_12\%$

Total $fill in the blank $8419$e$304$efc$305$b$\_13$ fill in the blank $8419$e$304$efc$305$b$\_14\%$ fill in the blank $8419$e$304$efc$305$b$\_15\%$

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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 da$9$ca$4$f$9$bfc$5019\_1$ fill in the blank da$9$ca$4$f$9$bfc$5019\_2\%$

Non$-$value$-$added fill in the blank da$9$ca$4$f$9$bfc$5019\_3$ fill in the blank da$9$ca$4$f$9$bfc$5019\_4\%$

Total $fill in the blank da$9$ca$4$f$9$bfc$5019\_5$ fill in the blank da$9$ca$4$f$9$bfc$5019\_6\%$

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