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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. 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 VA/NVA Classification Billing error correction $60,000 Cable signal testing 140,000 40,000 50,000 25,000 Reinstalling service (installed incorrectly the first time) Repairing satellite equipment Repairing underground cable connections to the customer Replacing old technology cable with higher quality cable Replacing old technology signal switches with higher quality switches 175,000 150,000 Responding to customer home repair requests 30,000 Training employees 80,000 Total activity cost $750,000 b. Prepare a cost of quality report. Assume that sales are $3,000,000. If required, round percentages to one decimal place. b. Prepare a cost of quality report. Assume that sales are $3,000,000. If required, round percentages to one decimal place. Three Rivers Inc. Cost of Quality Report u plitu Cost Percent of Total - Quality Cost Quality Cost Classification Percent of Total Sales Prevention Appraisal 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-added Non-value-added Total d. What percentage of total costs of quality are considered to be value-added

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