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 Cost Quality Cost Classification Value-Added/ Non-Value-Added Classification Quality Control Activities Billing error correction $35,800 Cable signal testing 95,200 Reinstalling service (installed incorrectly the first time) 77,100 Repairing satellite equipment 16,800 Repairing underground cable connections to the customer 23,300 Replacing old technology cable with higher quality cable 112,900 Replacing old technology signal switches with higher quality switches 129,000 Responding to customer home repair requests 43,000 Training employees 26,900 Total activity cost $560,000 b. Prepare a cost of quality report. Assume that sales are $2,800,000. If required, round percentages to one decimal place. Three Rivers Inc. Cost of Quality Report Percent of Total Percent of Quality Cost Quality Cost Total Sales Quality Cost Classification 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 % Total % d. What percentage of total costs of quality are considered to be value-added