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 | $21,700 | External failure | Non-value-added | |
| Cable signal testing | 49,000 | Appraisal | Value-added | |
| Reinstalling service (installed incorrectly the first time) | 46,700 | External failure | Non-value-added | |
| Repairing satellite equipment | 10,500 | Internal failure | Non-value-added | |
| Repairing underground cable connections to the customer | 14,100 | External failure | Non-value-added | |
| Replacing old technology cable with higher quality cable | 76,400 | Prevention | Value-added | |
| Replacing old technology signal switches with higher quality switches | 87,400 | Prevention | Value-added | |
| Responding to customer home repair requests | 26,000 | External failure | Non-value-added | |
| Training employees | 18,200 | Prevention | Value-added | |
| Total activity cost | $350,000 | |||
Feedback
Correct
b. Prepare a cost of quality report. Assume that sales are $1,400,000. 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 | $ | % | |
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Auditing Diversity In Library Collections
Authors: Rosalind Washington, Sarah Voels
1st Edition
1440878749, 978-1440878749
