Question: a. Using the information in Exercise 27-19, identify the cost of quality classification for each activity and whether the activity is value-added or non value-added.
a. Using the information in Exercise 27-19, 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 $2,000,000. Round percentages to one decimal place.
c. Prepare a value-added/non-value-added analysis.
d. Interpret the information in (b) and (c).
Activities Activity Cost
Billing error correction ............................................................ $ 36,000
Cable signal testing ............................................................... 96,000
Reinstalling service (installed incorrectly the first time) .................... 30,000
Repairing satellite equipment .................................................... 36,000
Repairing underground cable connections to the customer .................. 18,000
Replacing old technology cable with higher quality cable .................. 168,000
Replacing old technology signal switches with higher quality switches ... 126,000
Responding to customer home repair requests ................................ 24,000
Training employees .............................................................. 66,000
Total ................................................................................ $600,000
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