Digital Light Inc. provides cable TV and Internet service to the local community. The activities and activity costs of Digital Light are identified as follows: Activities

Activity Cost Billing error correction $ 50,000 Cable signal testing 70,000 Reinstalling service (installed incorrectly the first time) 55,000 Repairing satellite equipment 30,000 Repairing underground cable connections to the customer 15,000 Replacing old technology cable with higher quality cable 120,000 Replacing old technology signal switches with higher quality switches 95,000 Responding to customer home repair requests 20,000 Training employees 45,000 Total $500,000 Prepare a Pareto chart of these activities. Cost of quality and value-added/non-value-added reports obj. 2, 4 a. Using the activity data in Exercise prepare a cost of quality report. Assume that sales are $2,000,000. Round percentages to one decimal place. b. Using the activity data in Exercise prepare a value-added/non-value-added analysis. c. Interpret the information in (a) and (b).