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 $42,700 Cable signal testing 134,300 Reinstalling service installed incorrectly the first time) 91,700 31,600 Repairing satellite equipment Repairing underground cable connections to the customer 27,700 Replacing old technology cable with higher quality cable 172,500 Replacing old technology signal switches with higher quality switches 197,200 Responding to home repair requests 51,200 Training employees 41,100 Total activity cost $790,000 b. Prepare a cost of quality report. Assume that sales are $3,160,000. 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 value-addedon-value-added analysis. Three Rivers Inc. Value Added/Non-Value Added Activity Analysis Category Amount Percent Value-added % Non-value-added % Total $ d. What percentage of total costs of quality are considered to be value-added