Cost of quality and value-addedon-value-added reports for a service company Instructions Amount Descriptions ! Starting Question ! Cost of Quality Report Value-Added/Non-Value-Added Activity Analysis ! Final Question Instructions X 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: Activities Activity Cost 2 Billing error correction $60,000.00 3 Cable signal testing 140,000.00 4 Reinstalling service (installed incorrectly the first time) 40,000.00 5 Repairing satellite equipment 50,000.00 6 Repairing underground cable connections to the customer 25,000.00 7 Replacing old technology cable with higher quality cable 175,000.00 8 Replacing old technology signal switches with higher quality switches 150,000.00 Responding to customer home repair requests 30,000.00 10 Training employees 80,000.00 11 Total $750,000.00 Required: a. Identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added. b. Prepare a cost of quality report. Assume that sales are $3,000,000. Round percentages to one decimal place.* c. Prepare a value-addedon-value-added analysis.* d. Interpret the information in (b) and (c). Round your answer to one decimal place. *Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Check My Work PreviousAmount Descriptions X Amount Descriptions Appraisal External failure Internal failure Non-value-added Prevention Value-addedCost of quality and value-addedon-value-added reports for a service company Instructions Amount Descriptions ! Starting Question Cost of Quality Report ! Value-Added/Non-Value-Added Activity Analysis ! Final Question Cost of Quality Report Shaded cells have feedback. X Three Rivers Inc. Score: 27/79 Cost of Quality Report Percent of Total Percent of Total 1 Quality Cost Classification Quality Cost Quality Cost Sales 2 Prevention 3 Appraisal Internal failure External failure 6 Total Points: 6.49 / 19 Feedback Check My Work Classify each activity as either prevention, appraisal, internal failure or external failure. List the total costs of each of these four categories in a column called quality cost. In a separate column, determine the percent of each quality cost as compared to the total quality costs by dividing individual quality cost by the total quality cost. In another column, determine the percent of each quality cost classification as compared to total sales by dividing individual quality cost by the total sales amount. Total all columns. Remember that the Percent of total quality cost column should total to 100%.Value-Added/Non-Value-Added Activity Analysis Shaded cells have feedback c. Prepare a value-addedon-value-added analysis. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Three Rivers Inc. Score: 12/36 Value-Added/Non-Value-Added Activity Analysis 1 Category Amount Percent Value-added 3 Non-value-added Total Points: 2.67 / 8 Feedback Check My Work Reclassify the individual activities as value-added and non-value-added. Calculate the percentage of the total costs that are value-added and those that are non-value-added.Final Question Shaded cells have feedback. X d. Interpret the information in (b) and (c). Round your answer to one decimal place. What percentage of total costs of quality are considered to be value-added? 16% X Points: 0 / 1 Feedback Check My Work Review the distinction between value-added and non-value-added cost of quality