Cost of Quality and Value Added/Non-Value Added Reports for a Service Company Three Rivers Inc. provides cable TV and In

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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 In 1 (37.57 KiB) Viewed 53 times

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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 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 $20,900 Cable signal testing 61,200 Appraisal External failure Reinstalling service (installed incorrectly the first 44,900 Internal failure time) Prevention Repairing satellite equipment Repairing underground cable connections to the 13,600 2 21,600 customer 72,600 82,900 Replacing old technology cable with higher quality cable Replacing old technology signal switches with higher quality switches Responding to customer home repair requests Training employees 25,000 17,300 $360,000 Total activity cost Food
b. Prepare a cost of quality report. Assume that sales are $1,800,000. If required, round percentages to one decimal place. Three Rivers Inc. Cost of Quality Report Percent of Total Quality Cost Quality Cost Quality Cost Classification Percent of Total Sales Prevention 81,000 X % % % % Appraisal Internal failure % % External failure % % % Total % Feedback Check My Work b. Classify each activity as either prevention, appraisal, internal failure or external failure. List the total costs of each of these quality cost. In a separate column, determine the percent of each quality cost as compared to the total quality costs by dividin by the total quality cost. In another column, determine the percent of each quality cost classification as compared to total sale classes by the total sales amount. Total all columns. Remember that the Percent of total quality cost column should total to 10 c. Prepare a value-added/non-value-added analysis, Three Rivers Inc. Value-Added/Non-Value-Added Activity Analysis
Three Rivers Inc. Value-Added/Non-Value-Added Activity Analysis Category Amount Percent Value-added % % Non-value-added % Tota! Feedback Check My Work c. Reclassify the individual activities as value-added and non-value-added. Calculate the percentage of the total costs that are value-ad non-value-added. d. What percentage of total costs of quality are considered to be value-added? Feedback Check My Work d. Review the distinction between value-added and non-value-added cost of quality. Feedback Check My Work Incorrect