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. 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 External failure 140,000 Appraisal Non-value-added Value-added Cable signal testing Reinstalling service (installed incorrectly the first time) 40,000 External failure Non-value-added Repairing satellite equipment 50,000 Internal failure Non-value-added Repairing underground cable connections to the customer 25,000 External failure Non-value-added Replacing old technology cable with higher quality cable 175,000 Prevention Value-added Replacing old technology signal switches with higher quality switches 150,000 Prevention Value-added Responding to customer home repair requests 30,000 External failure Non-value-added Training employees 80,000 Prevention Value-added Total activity cost $750,000 b. Prepare a cost of quality report. Assume that sales are $3,000,000. If required, round percentages to one decimal place. Three Rivers Inc. Cost of Quality Report Quality Cost Ost Percent of Total Percent of 2 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