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 as follows: a. Identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added. Activity Quality Cost Cost Classification Value-Added/ Non-Value Added Classification Quality Control Activities Billing error correction $28,600 76,500 Cable signal testing Reinstalling service (installed incorrectly the first time) Appraisal External failure Internal failure Prevention 61,400 Repairing satellite equipment 25,500 Repairing underground cable connections to the customer 18,600 Replacing old technology cable with higher quality cable 111,400 Replacing old technology signal switches with higher quality switches 127,300 Responding to customer home repair requests 34,200 Training employees 26,500 Training employees 26,500 Total activity cost $510,000 b. Prepare a cost of quality report. Assume that sales are $2,550,000. If required, round percentages to one decimal place. Three Rivers Inc. Cost of Quality Report Percent of Total Quality Cost Quality Cost Quality Cost Classification Percent of Total Sales Prevention % % Appraisal % % Internal failure % % External failure % % Total % % c. Prepare a value-addedon-value-added analysis. Three Rivers Inc. Value Added/Non-Value-Added Activity Analysis Category Amount Percent Value-added % Non-value-added % Category Amount Percent Value-added % Non-value-added % Total % d. What percentage of total costs of quality are considered to be value-added? 52.0% 15.0% 67.0% maining. Ne None of these options are correct