A. Using the information in Exercise 17, identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added. B. Prepare a cost of quality report. Assume that sales are $3,000,000.
C. Prepare a value-added/non-value-added analysis.
D. Interpret the information in (B) and (C).
Three Rivers Inc. provides cable TV and Internet service to the local community. The activities and activity costs of Three Rivers are identified as follows:
Activities………………………………………………………………… …..Activity Cost
Billing error correction………………………………………………………$ 60,000
Cable signal testing……………………………………………………………140,0 00
Reinstalling service (installed incorrectly the first time)……………………40,000
Repairing satellite equipment…………………………………………………50,000< br /> Repairing underground cable connections to the customer………………25,000
Replacing old technology cable with higher quality cable…………………175,000
Replacing old technology signal switches with higher quality switches…150,000
Responding to customer home repair requests……………………………30,000
Training employees Training employees……………………………………80,000
Total……………………………………………………………………………$ 750,000
Prepare a Pareto chart of these activities.