Mountain States Cable Co. provides cable TV and Internet service to the local community.
The activities and activity costs of Mountain States are identified as follows:
- Activities Activity Cost
- Billing error correction $ 28,000
- Cable signal testing 60,000
- Reinstalling service (installed incorrectly the ?rst time) 44,000
- Repairing satellite equipment 24,000
- Repairing underground cable connections to the customer 12,000
- Replacing old technology cable with higher quality cable 100,000
- Replacing old technology signal switches with higher quality switches 76,000
- Responding to customer home repair requests 20,000
- Training employees 36,000
- Total $400,000
Prepare a Pareto chart of these activities.
a. Using the activity data in Exercise prepare a cost of quality report. Assume that sales are $2,000,000. Round percentages to one decimal place.
b. Using the activity data in Exercise prepare a value-added/non-value-added analysis.