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. Quality Control Activities Activity Cost Quality Cost Classification Value-Added/ Non-Value-Added Classification Billing error correction $28,400       Cable signal testing 78,400       Reinstalling service (installed incorrectly the first time) 61,100       Repairing satellite equipment 34,300       Repairing underground cable connections to the customer 18,500       Replacing old technology cable with higher quality cable 98,800       Replacing old technology signal switches with higher quality switches 112,900       Responding to customer home repair requests 34,100       Training employees 23,500          Total activity cost $490,000       b.  Prepare a cost of quality report. Assume that sales are $2,450,000. If required, round percentages to one decimal place.   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 f2a4b30e4fb5f8a_1 fill in the blank f2a4b30e4fb5f8a_2% fill in the blank f2a4b30e4fb5f8a_3% Appraisal fill in the blank f2a4b30e4fb5f8a_4 fill in the blank f2a4b30e4fb5f8a_5% fill in the blank f2a4b30e4fb5f8a_6% Internal failure fill in the blank f2a4b30e4fb5f8a_7 fill in the blank f2a4b30e4fb5f8a_8% fill in the blank f2a4b30e4fb5f8a_9% External failure fill in the blank f2a4b30e4fb5f8a_10 fill in the blank f2a4b30e4fb5f8a_11% fill in the blank f2a4b30e4fb5f8a_12% Total $fill in the blank f2a4b30e4fb5f8a_13 fill in the blank f2a4b30e4fb5f8a_14% fill in the blank f2a4b30e4fb5f8a_15% c.  Prepare a value-added/non-value-added analysis.   Three Rivers Inc. Value-Added/Non-Value-Added Activity Analysis Category Amount Percent Value-added $fill in the blank 982667089fc7f9f_1 fill in the blank 982667089fc7f9f_2% Non-value-added fill in the blank 982667089fc7f9f_3 fill in the blank 982667089fc7f9f_4% Total $fill in the blank 982667089fc7f9f_5 fill in the blank 982667089fc7f9f_6% d.  What percentage of total costs of quality are considered to be value-added?

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Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.  

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.