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: Question Content Area 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 $42,800 External failure Non-value-added Cable signal testing 117,300 Appraisal Non-value-added Reinstalling service (installed incorrectly the first time) 92,000 Internal failure Non-value-added Repairing satellite equipment 20,700 Internal failure Non-value-added Repairing underground cable connections to the customer 27,800 Internal failure Non-value-added Replacing old technology cable with higher quality cable 142,000 Appraisal Value-added Replacing old technology signal switches with higher quality switches 162,300 Appraisal Value-added Responding to customer home repair requests 51,300 Internal failure Non-value-added Training employees 33,800 Prevention Non-value-added Total activity cost $690,000 Question Content Area b. Prepare a cost of quality report. Assume that sales are $2,760,000. If required, round percentages to one decimal place. blank Three Rivers Inc. Cost of Quality Report Quality Cost Classification Quality Cost Percent of Total Quality Cost Percent of Total Sales Prevention $fill in the blank c673e6f9602803b_1 33,800 fill in the blank c673e6f9602803b_2 % fill in the blank c673e6f9602803b_3 % Appraisal fill in the blank c673e6f9602803b_4 421,600 fill in the blank c673e6f9602803b_5 % fill in the blank c673e6f9602803b_6 % Internal failure fill in the blank c673e6f9602803b_7 191,800 fill in the blank c673e6f9602803b_8 % fill in the blank c673e6f9602803b_9 % External failure fill in the blank c673e6f9602803b_10 42,800 fill in the blank c673e6f9602803b_11 % fill in the blank c673e6f9602803b_12 % Total $fill in the blank c673e6f9602803b_13 690,000 fill in the blank c673e6f9602803b_14 % fill in the blank c673e6f9602803b_15 % Question Content Area c. Prepare a value-added/non-value-added analysis. blank Three Rivers Inc. Value-Added/Non-Value-Added Activity Analysis Category Amount Percent Value-added $fill in the blank 502468008faef95_1 fill in the blank 502468008faef95_2 % Non-value-added fill in the blank 502468008faef95_3 fill in the blank 502468008faef95_4 % Total $fill in the blank 502468008faef95_5 fill in the blank 502468008faef95_6 % Question Content Area d. What percentage of total costs of quality are considered to be value-added?
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:
Question Content Area
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 $42,800
External failure
Non-value-added
Cable signal testing 117,300
Appraisal
Non-value-added
Reinstalling service (installed incorrectly the first time) 92,000
Internal failure
Non-value-added
Repairing satellite equipment 20,700
Internal failure
Non-value-added
Repairing underground cable connections to the customer 27,800
Internal failure
Non-value-added
Replacing old technology cable with higher quality cable 142,000
Appraisal
Value-added
Replacing old technology signal switches with higher quality switches 162,300
Appraisal
Value-added
Responding to customer home repair requests 51,300
Internal failure
Non-value-added
Training employees 33,800
Prevention
Non-value-added
Total activity cost $690,000
Question Content Area
b. Prepare a cost of quality report. Assume that sales are $2,760,000. If required, round percentages to one decimal place.
blank
Three Rivers Inc.
Cost of Quality Report
Quality Cost
Classification Quality Cost Percent of Total
Quality Cost Percent of
Total Sales
Prevention $fill in the blank c673e6f9602803b_1
33,800
fill in the blank c673e6f9602803b_2
% fill in the blank c673e6f9602803b_3
%
Appraisal fill in the blank c673e6f9602803b_4
421,600
fill in the blank c673e6f9602803b_5
% fill in the blank c673e6f9602803b_6
%
Internal failure fill in the blank c673e6f9602803b_7
191,800
fill in the blank c673e6f9602803b_8
% fill in the blank c673e6f9602803b_9
%
External failure fill in the blank c673e6f9602803b_10
42,800
fill in the blank c673e6f9602803b_11
% fill in the blank c673e6f9602803b_12
%
Total $fill in the blank c673e6f9602803b_13
690,000
fill in the blank c673e6f9602803b_14
% fill in the blank c673e6f9602803b_15
%
Question Content Area
c. Prepare a value-added/non-value-added analysis.
blank
Three Rivers Inc.
Value-Added/Non-Value-Added Activity Analysis
Category Amount Percent
Value-added $fill in the blank 502468008faef95_1
fill in the blank 502468008faef95_2
%
Non-value-added fill in the blank 502468008faef95_3
fill in the blank 502468008faef95_4
%
Total $fill in the blank 502468008faef95_5
fill in the blank 502468008faef95_6
%
Question Content Area
d. What percentage of total costs of quality are considered to be value-added?
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