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 Quality Cost Quality Control Activities Billing error correction Cost Classification $40,300 External failure Value-Added/ Non-Value-Added Classification Non-value-added v Cable signal testing 142,800 Appraisal Value-added < Reinstalling service (installed incorrectly the first time) 86,700 External failure Non-value-added w Repairing satellite equipment 42,000 Internal failure Non-value-added v Repairing underground cable connections to the customer 26,200 External failure Non-value-added v Replacing old technology cable with higher quality cable Replacing old technology signal switches with higher quality switches 190,500 Prevention Value-added 217,700 Prevention Value-added Responding to customer home repair requests 48,400 External failure Training employees 45,400 Prevention Non-value-added v Value-added Check My Work Previous Next