Problem 12-43 Cost Distribution Using Allocation Bases; Hospital (LO 12-4) 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 hospital's organization is shown in the following chart. Rocky Mountain General Hospital General Surgical Medical Administrative Medicine Division Support Division Division Division Nursing Radiology Nutrition Housekeeping Maintenance Department and Department Department Department Laboratory Department Registered Patient Kitchen Dietitians' Food Section Service Patient Cafeteria Food Service The following table shows the cost allocation bases used to distribute various costs among the hospital's divisions.The following table shows the cost allocation bases used to distribute various costs among the hospital's divisions. Cost Pool Cost Allocation Base Annual Cost Facilities: Building depreciation Square feet of space $206, 000 Equipment depreciation Insurance Utilities: Electricity Cubic feet of space 40, 000 Waste disposal Water and sewer Cable TV and phone Heat General administration: Administrator Budgeted number of employees 236, 000 Administrative staff Office supplies Community outreach: Public education Budgeted dollars of patient billings 56, 000 School physical exams Shown below are the amounts of each cost allocation base associated with each division. Square Cubic Number of Patient Feet Feet Employees Billings General Medicine Division 20, 160 201, 600 30 $2, 850, 000 Surgical Division 11, 760 134, 400 20 1, 425, 000 Medical Support Division 12, 320 123, 200 20 475, 000 Administrative Division 11, 760 100, 800 30 Total 56, 000 560, 000 100 $4, 750, 000 Required: 1. Prepare a table that distributes each of the costs listed in the preceding table to the hospital's divisions. 2. Review the appropriateness of patient billings as the basis for distributing community outreach costs to the hospital's divisions, what would be the best allocation base? 3. What are the benefits of allocating utility costs to the divisions?Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a table that distributes each of the costs listed in the preceding table to the hospital's divisions. (Round "Percentage of Total" answers to 2 decimal places. (i.e., 0.1234 should be entered as 12.34)) Costs Cost Pool Division Allocation Base Percentage of Total 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 0 cu. ft. 0.00 % $ 0 General administration General Medicine empl % Surgical Medical Support Administrative Total 0 empl 0.00 % $ Community outreach General Medicine billings % Surgical Medical Support Administrative Total $ 0 billings 0.00 % $
