Question
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:
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.
| Quality Control Activities | Activity Cost | Quality Cost Classification | Value-Added/ Non-Value-Added Classification | |
| Billing error correction | $23,800 | External failure | Non-value-added | |
| Cable signal testing | 73,800 | Appraisal | Value-added | |
| Reinstalling service (installed incorrectly the first time) | 51,100 | External failure | Non-value-added | |
| Repairing satellite equipment | 16,400 | Internal failure | Non-value-added | |
| Repairing underground cable connections to the customer | 15,500 | External failure | Non-value-added | |
| Replacing old technology cable with higher quality cable | 84,400 | Prevention | Value-added | |
| Replacing old technology signal switches with higher quality switches | 96,400 | Prevention | Value-added | |
| Responding to customer home repair requests | 28,500 | External failure | Non-value-added | |
| Training employees | 20,100 | Prevention | Value-added | |
| Total activity cost | $410,000 | |||
b. Prepare a cost of quality report. Assume that sales are $1,640,000. 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 | Percent of Total Sales |
| Prevention | $ | % | % |
| Appraisal | % | % | |
| Internal failure | % | % | |
| External failure | % | % | |
| Total | $ | % | % |
c. Prepare a value-added/non-value-added analysis.
| Three Rivers Inc. | ||
| Value-Added/Non-Value-Added Activity Analysis | ||
| Category | Amount | Percent |
| Value-added | $ | % |
| Non-value-added | % | |
| Total | $ | % |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Information Audit For The Management Process Empresa Nacional De Productos Agropecuarios ENPA Of Villa Clara
Authors: Alejandra María Osorio Capote, Manuel Osvaldo Machado Rivero, Dianelys Martínez Paz
1st Edition
6203767883, 978-6203767889
