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Rocky Mountain General Hospital serves three counties in Colorado. The hospital is a nonprofit organization that is supported by patient billings, county and state funds, and private donations. The hospitals organization is shown in the following chart.

The following table shows the cost allocation bases used to distribute various costs among the hospitals divisions.

Cost Pool		Cost Allocation Base	Annual Cost
Facilities:
Building depreciation		Square feet of space	$	209,000
Equipment depreciation
Insurance
Utilities:
Electricity		Cubic feet of space		43,000
Waste disposal
Water and sewer
Cable TV and phone
Heat
General administration:
Administrator		Budgeted number of employees		239,000
Administrative staff
Office supplies
Community outreach:
Public education		Budgeted dollars of patient billings		59,000
School physical exams

Shown below are the amounts of each cost allocation base associated with each division.

	Square Feet			Cubic Feet			Number of Employees				Patient Billings
General Medicine Division		20,650			194,700			35			$	2,940,000
Surgical Division		11,800			147,500			15				1,470,000
Medical Support Division		14,750			129,800			15				490,000
Administrative Division		11,800			118,000			35				0
Total		59,000			590,000			100			$	4,900,000

Required: 1. Prepare a table that distributes each of the costs listed in the preceding table to the hospitals divisions. 2. Review the appropriateness of patient billings as the basis for distributing community outreach costs to the hospitals divisions, what would be the best allocation base? 3. What are the benefits of allocating utility costs to the divisions?

Prepare a table that distributes each of the costs listed in the preceding table to the hospitals divisions. (Round "Percentage of Total" answers to 2 decimal places. (i.e., 0.1234 should be entered as 12.34))

Rocky Mountain General Hospital General Medicine Division Surgical Division Medical Support Division Administrative Division Nursing Department Radiology and Laboratory Department Nutrition Department Housekeeping Department Maintenance Department Kitchen Registered Dietitians' Section Patient Food Service Cafeteria Patient Food Service Cost Pool Division Allocation Base Percentage of Total Costs Distributed Facilities General Medicine sq. ft. % Surgical Medical Support Administrative Total 0 sq. ft. 0.00 % $ 0 Utilities General Medicine cu. ft. % Surgical Medical Support Administrative Total o cu. ft. 0.00 % $ 0 General administration General Medicine empl. % Surgical Medical Support Administrative Total 0 empl. 0.00 % $ 0 Community outreach General Medicine billings % Surgical Medical Support Administrative Total $ o billings 0.00 % $ 0 Complete this question by entering your answers in the tabs below. -equired 1 Required 2 Required 3 eview the appropriateness of patient billings as the basis for distributing community outreach costs to the hospital's divisions, what would be the bes The wage earnings of each division's personnel. This base would reflect the employee costs for which work has been done for the program. The number of hours spent by each division's personnel in community outreach activities. This base would be more reflective of the actual contribution of each division to The number of employees in each division. This base would be more reflective of the actual contribution of each division to the program. Required 1 Required 2 Required 3 What are the benefits of allocating utility costs to the divisions? (Select "Yes" if the stater costs to the divisions, and "No" if it is not a benefit.) Third-party reimbursements, such as those from insurance companies, are more accurate. Helps decrease overall costs. It improves the profitability position of the various divisions. Division managers are able to reflect the costs when pricing services. It brings about a good coordination among the various divisions in the usage of utilities. The total cost of running the division is reflected. Rocky Mountain General Hospital General Medicine Division Surgical Division Medical Support Division Administrative Division Nursing Department Radiology and Laboratory Department Nutrition Department Housekeeping Department Maintenance Department Kitchen Registered Dietitians' Section Patient Food Service Cafeteria Patient Food Service Cost Pool Division Allocation Base Percentage of Total Costs Distributed Facilities General Medicine sq. ft. % Surgical Medical Support Administrative Total 0 sq. ft. 0.00 % $ 0 Utilities General Medicine cu. ft. % Surgical Medical Support Administrative Total o cu. ft. 0.00 % $ 0 General administration General Medicine empl. % Surgical Medical Support Administrative Total 0 empl. 0.00 % $ 0 Community outreach General Medicine billings % Surgical Medical Support Administrative Total $ o billings 0.00 % $ 0 Complete this question by entering your answers in the tabs below. -equired 1 Required 2 Required 3 eview the appropriateness of patient billings as the basis for distributing community outreach costs to the hospital's divisions, what would be the bes The wage earnings of each division's personnel. This base would reflect the employee costs for which work has been done for the program. The number of hours spent by each division's personnel in community outreach activities. This base would be more reflective of the actual contribution of each division to The number of employees in each division. This base would be more reflective of the actual contribution of each division to the program. Required 1 Required 2 Required 3 What are the benefits of allocating utility costs to the divisions? (Select "Yes" if the stater costs to the divisions, and "No" if it is not a benefit.) Third-party reimbursements, such as those from insurance companies, are more accurate. Helps decrease overall costs. It improves the profitability position of the various divisions. Division managers are able to reflect the costs when pricing services. It brings about a good coordination among the various divisions in the usage of utilities. The total cost of running the division is reflected

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