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. Value Added/ Activity Quality Cost Non-Value-Added Quality Control Activities Cost Classification Classification Billing error correction $40,600 External failure Non-value-added Cable signal testing 126,000 Appraisal Value-added Reinstalling service (installed incorrectly the first 87,300 External failure time) Non-value-added Repairing satellite equipment 49,000 Internal failure Non-value-added Repairing underground cable connections to the 26,400. External failure Non-value-added customer Replacing old technology cable with higher quality 135,200 Prevention Value-added cable Replacing old technology signal switches with higher quality switches 154,600 Prevention Value-added Responding to customer home repair requests 48,700 External failure Non-value-added Training employees 32,200 Prevention Value-added Total activity cost $700,000 Feedback b. Prepare a cost of quality report. Assume that sales are $2,800,000. If required, round percentages to one decimal place. Quality Cost Classification Three Rivers Inc. Cost of Quality Report Quality Cost Percent of Total Quality Cost X 4 Percent of Total Sales Prevention 9 Appraisal % Internal failure External failure RI Total Feedback 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 % % Total