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: Activity Cost Billing error correction $44,200 a. Identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added. Quality Control Activities Value-Added/ Non-Value-Added Classification Non-value-added Quality Cost Classification External failure Cable signal testing 134,300 Reinstalling service (installed incorrectly the 95,100 first time) Repairing satellite equipment 31,600 Repairing underground cable connections to 28,800 the customer Replacing old technology cable with higher 169,200 quality cable Replacing old technology signal switches with 193,400 higher quality switches Responding to customer home repair requests 53,100 Training employees 40,300 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 Quality Cost Percent of Total Quality Cost Classification Quality Cost Percent of Total Sales Prevention % % Appraisal % % Internal failure % % External failure % % Total % % c. Prepare a value-added/non-value-added analysis. Three Rivers Inc. Value-Added/Non-Value-Added Category Activity Analysis Value-added Non-value-added Total Amount Percent $ % % % d. What percentage of total costs of quality are considered to be value-added?