Refer to the organization chart for Rocky Mountain General Hospital given in the preceding Ignore the rest of the data in that problem. The following table shows the cost allocation bases 2. Comment on the appropriateness of patient billings as the basis for distributing community 3. Is there any use in allocating utilities costs to the divisions? What purposes could such an alle 4. Build a spreadsheet: Construct an Excel spreadsheet to solve requirement above. Show how the solution will change if the following information changes the costs incurred were Sex $25.000, $200,000, and $50,000, for facilities, utilities, general administration, and com Problem 12-43 Cost Distribution Using Allo- cation Bases: Hospital (LO 12-4) distribute various costs among the hospital's divisions. Annual Cost Facilities. General Medicine: Cost Allocation Base Cost Pool $71250 5190.000 Square feet of space Facilities: Building depreciation Equipment depreciation Insurance 24000 Utilities Cubic feet of space Electricity Waste disposal Water and sewer Cable TV and phone Heat 220,000 General administration Budgeted number of employees Administrator Administrative staff Office supplies Community Outreach Budgeted dollars of patient bilings 40.000 Public education School physical exams Shown below are the amounts of each cost allocation base associated with each division Number of Patient Square Feet Cubic Feet Employees Bing General Medicine Division 15,000 135,000 $2.000.000 Surgical Division 8.000 100,000 Medical Support Division 9,000 90.000 20 Administrative Division 8,000 75.000 30 Total 40,000 400,000 100 Required: 1. Prepare a table similar to Exhibit 12-S that distributes each of the costs listed in the preceding table to the hospital's divisions, reach costs to the hospital's divisions. Can you suggest a better allocation base? tion process serve? 8 8 8 8|8| 34.00 outreach, respectively. zation that is supported by patient billings, county and state funds, and private donations. The hospital's Rocky Mountain General Hospital serves three counties in Colorado. The hospital is a nonprofit organi- organization is shown in the following chart. Scorecard 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
