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 $62,300 External failure. Value-Added/ Non-Value Added Classification Non-value-added Value added Non-value added. Non-value added Non-value-added 151,300 Appraisal Reinstalling service (installed incorrectly the first time) 133,900 External failure Repairing satellite equipment 26,700 Internal failure. Repairing underground cable connections to the customer 40,500 External failure Replacing old technology cable with higher quality cable 168,200 Prevention Value-added Replacing old technology signal switches with higher quality switches Responding to customer home repair requests Training employees Total activity cost 192,200 Prevention Value-added 74,800 External failure Non-value added 40,100 Prevention $890,000 Value-added