Exercise 27-20 Cost of quality and value-added/non-value-added reports Mountain States Cable Co. provides cable TV and Internet service to the local community. The activities and activity costs of Mountain States are identified as follows: Hide a. Prepare a cost of quality report. Assume that sales are $2,000,000. If required, round percentages to one decimal place. Mountain States Cable Company Cost of Quality Report Quality Cost Classification Quality Cost Percent of Total Quality Cost Percent of Total Sales Prevention $ % % Appraisal Internal failure External failure Total $ % % Hide b. Prepare a value-added/non-value-added analysis. Mountain States Cable Company Value-Added/Non-Value-Added Activity Analysis Category Amount Percent Value-added $ % Non-value-added Total $ % c. Interpret the information in (a) and (b)