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Cost of Quality and Value-Added/Non-Value-Added Reports 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 $18,200 External failure Non-value-added v Cable signal testing 68,400 Appraisal v Value-added Reinstalling service (installed incorrectly the first 39,200 External failure v Non-value-added v time) Repairing satellite equipment 19,000 Internal failure v Non-value-added Repairing underground cable connections to the 11,900 External failure Non-value-added customer Replacing old technology cable with higher quality 84,600 Prevention Value-added cable Replacing old technology signal switches with 96,700 Prevention Value-added higher quality switches Responding to customer home repair requests 21,900 External failure Non-value-added Training employees 20,100 Prevention Value-added Total activity cost $380,000

Cost of Quality and Value-Added/Non-Value-Added Reports 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 $18,200 External failure Non-value-added v Cable signal testing 68,400 Appraisal v Value-added Reinstalling service (installed incorrectly the first 39,200 External failure v Non-value-added v time) Repairing satellite equipment 19,000 Internal failure v Non-value-added Repairing underground cable connections to the 11,900 External failure Non-value-added customer Replacing old technology cable with higher quality 84,600 Prevention Value-added cable Replacing old technology signal switches with 96,700 Prevention Value-added higher quality switches Responding to customer home repair requests 21,900 External failure Non-value-added Training employees 20,100 Prevention Value-added Total activity cost $380,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(8) Mfg:

b. Prepare a cost of quality report. Assume that sales are $1,900,000. If required, round percentages to one decimal place. Three Rivers Inc. Cost of Quality Report Quality Cost Percent of Total Percent of Quality Cost Classification Quality Cost Total Sales Prevention % % Appraisal % Internal failure % % External failure % % Total % % Feedback c. Prepare a value-added/non-value-added analysis. Three Rivers Inc. Value-Added/Non-Value-Added Activity Analysis Category Amount Percent Value-added $4 % Non-value-added % Total % Feedback Check My Work d. What percentage of total costs of quality are considered to be value-added?
Transcribed Image Text:b. Prepare a cost of quality report. Assume that sales are $1,900,000. If required, round percentages to one decimal place. Three Rivers Inc. Cost of Quality Report Quality Cost Percent of Total Percent of Quality Cost Classification Quality Cost Total Sales Prevention % % Appraisal % Internal failure % % External failure % % Total % % Feedback c. Prepare a value-added/non-value-added analysis. Three Rivers Inc. Value-Added/Non-Value-Added Activity Analysis Category Amount Percent Value-added $4 % Non-value-added % Total % Feedback Check My Work d. What percentage of total costs of quality are considered to be value-added?
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 $18,200 External failure v Non-value-added Cable signal testing 68,400 Appraisal Value-added Reinstalling service (installed incorrectly the first 39,200 External failure v Non-value-added time) Repairing satellite equipment 19,000 Internal failure Non-value-added Repairing underground cable connections to the 11,900 External failure v Non-value-added customer Replacing old technology cable with higher quality 84,600 Prevention Value-added cable Replacing old technology signal switches with 96,700 Prevention Value-added higher quality switches Responding to customer home repair requests 21,900 External failure v Non-value-added Training employees 20,100 Prevention v Value-added Total activity cost $380,000
Transcribed Image Text: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 $18,200 External failure v Non-value-added Cable signal testing 68,400 Appraisal Value-added Reinstalling service (installed incorrectly the first 39,200 External failure v Non-value-added time) Repairing satellite equipment 19,000 Internal failure Non-value-added Repairing underground cable connections to the 11,900 External failure v Non-value-added customer Replacing old technology cable with higher quality 84,600 Prevention Value-added cable Replacing old technology signal switches with 96,700 Prevention Value-added higher quality switches Responding to customer home repair requests 21,900 External failure v Non-value-added Training employees 20,100 Prevention v Value-added Total activity cost $380,000
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