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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 activitles
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 activitles and activity costs of Three Rivers are identified as follows a. Identify the cost of quality classification for each activity and whether the actlivity is value-added or non-value-added Value-Added/ Activity Quality Cost Non-Value-Added Quality Control Activities Cost Classification Classification $29.400 External failureNon-value-added Billing error correction Cable signal testing 78,400 Appraisal Value-added Reinstalling service (installed incorrectly the first 63,200 External failureNon-value-added ime 29,400 Internal failureNon-value-added Repairing satellite equipment Repairing underground cable connections to the 19,100 External failureNon-value-added Replacing old technology cable with higher quality Value-added 98,800 Prevention cable Replacing old technology signal switches with higher Value-added 112,900 Prevention quality switches 5,300 External failureN Non-value-added Responding to customer home repair requests Value-added 23,500 Prevention Training employees $490,000 Total activity cost b. Prepare a cost of quality report. Assume that sales are $2,450,000. If required, round percentages to one decimal place. Three Rivers Inc. Cost of Quality Report Quality Cost Percent of Total Quality Cost Quality Cost Classification Percent of Total Sales Prevention Appraisal Internal failure 96 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
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