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. General Medicine Division Nursing Department Rocky Mountain General Hospital Surgical Division Radiology and Laboratory Department Registered Dietitians' Section Medical Support Division Nutrition Department Patient Food Service Patient Food Service Administrative Division Housekeeping Department Cafeteria Maintenance Department Kitchen Shown below are the amounts of each cost allocation base associated with each division. General Medicine Division Surgical Division Medical Support Division Administrative Division Total Square Feet 15,750 9,000 11,250 9,000 45,000 Cubic Feet 153,000 117,000 99,000 81,000 450,000 Number of Employees 35 15 15 35 100 Patient Billings $2,520,000 1,260,000 420,000 0 $4,200,000 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, would be the best allocation base? 3. What are the benefits of allocating utility costs to the divisions? Facilities Utilities Cost Pool General administration Community outreach General Medicine Surgical Medical Support Administrative Total General Medicine Surgical Medical Support Administrative Total Division General Medicine Surgical Medical Support Administrative Total General Medicine Surgical Medical Support Administrative Total Allocation Base sq. ft. sq. ft. cu. ft. cu. ft. empl. empl. billings billings Percentage of Total % % % % % % % % Costs Distributed Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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? 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 program. The number of employees in each division. This base would be more reflective of the actual contribution of each division to the program. Required 3 > < Required 1 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What are the benefits of allocating utility costs to the divisions? (Select "Yes" if the statement is a benefit of allocating utility 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. < Required 2 Required 3