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. Quality Control Activities Billing error correction Cable signal testing Activity Quality Cost Cost Classification $38,300 External failure. 99,400 Appraisal Value-Added/ Non-Value-Added Classification Non-value-added Value-added Non-value-added Reinstalling service (installed incorrectly the first time) 82,400 External failure Repairing satellite equipment 28,400 Internal failure Non-value-added Repairing underground cable connections to the customer 24,900 External failure Non-value-added Replacing old technology cable with higher quality cable 164,000 Prevention Value-added Replacing old technology signal switches with higher quality switches Responding to customer home repair requests Training employees 187,400 Prevention Value-added 46,100 External failure Non-value-added 39,100 Prevention Value-added Total activity cost $710,000 Feedback eBook Show Me How Replacing old technology signal switches with higher quality switches Print Item 187,400 Prevention Value-added Responding to customer home repair requests 46,100 External failure Non-value-added Training employees 39,100 Prevention Value-added Total activity cost $710,000 Feedback Check My Work b. Prepare a cost of quality report. Assume that sales are $3,550,000. If required, round percentages to one decimal place. Quality Cost Three Rivers Inc. Cost of Quality Report Percent of Total Percent of Quality Cost Classification Quality Cost Total Sales Prevention 390,500 55 % 11% Appraisal 99,400 14 % x% Internal failure 28,400 4% X% External failure 191,700 27 % X% Total 710,000 100 % 20 % Feedback Check My Work