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 Cost $34,000 Quality Cost Classification Value-Added/ Non-Value-Added Classification Quality Control Activities Billing error correction Cable signal testing 122,400 Reinstalling service (installed incorrectly the first time) 73,100 Repairing satellite equipment 20,400 Repairing underground cable connections to the customer 22,100 Replacing old technology cable with higher quality cable 154,200 Replacing old technology signal switches with higher quality switches 176,300 Responding to customer home repair requests 40,800 36,700 Training employees $680,000 Total activity cost d whether the activity is value-added or non-value-added. Value-Added/ Quality Cost Non-Value-Added Classification Classification ) D D Appraisal External failure Internal failure Prevention b. Prepare a cost of quality report. Assume that sales are $2,720,000. If required, round percentages to one decimal place. Three Rivers Inc. Cost of Quality Report Quality Cost Classification Percent of Total Quality Cost Percent of Total Sales 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 d. What percentage of total costs of quality are considered to be value-added? Quality Cost % %