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PLEASE ANSWER ALL PARTS OF THE QUESTION BELOW: Cost of Quality and Value Added/Non-Value Added Reports for a Service Company Three Rivers Inc. provides cable
PLEASE ANSWER ALL PARTS OF THE QUESTION BELOW:
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. Value-Added/ Activity Quality Cost Non-Value Added Quality Control Activities Cost Classification Classification Billing error correction $22,800 60,800 Cable signal testing Reinstalling service (installed incorrectly the first time) 49,000 19,000 Repairing satellite equipment Repairing underground cable connections to the customer 14,800 Replacing old technology cable with higher quality cable 78,200 Replacing old technology signal switches with higher quality switches 89,400 27,400 Responding to customer home repair requests Training employees 18,600 Total activity cost $380,000 b. Prepare a cost of quality report. Assume that sales are $1,520,000. If required, round percentages to one decimal place. Three Rivers Inc. Cost of Quality Report Quality Cost Classification Quality Cost Percent of Total Quality Cost Prevention % Appraisal Percent of Total Sales % % % 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-ad % Non-value-added % Total % d. What percentage of total costs of quality are considered to be value-added
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