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