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 Medical General Surgical Division Administrative Division Medicine Support Division Division Radiology Housekeeping Department Nursing Department Nutrition Maintenance Department Department and Laboratory Department Registered Dietitians' Kitchen Food Service Continn Coatian Patient Cafeteria Food Service The following table shows the cost allocation bases used to distribute various costs among the hospital's divisions. Cost Allocation Base Annual Cost Cost Pool Facilities: Building depreciation Equipment depreciation Square feet of space $190,000 Insurance Utilities: Cubic feet of space Electricity Waste disposal 24, 0 Water and sewer Cable TV and phone eat General administration: Administrator Budgeted number of employees 220, 00 Administrative staff Office supplies Community outreach: Public education Budgeted dollars of patient billings 40,e00 School physical exams Shown below are the amounts of each cost allocation base associated with each division. Patient Number of Cubic Feet Billings $2,000,e00 1,250,000 750,000 Square Feet 15, 8,000 9,e00 8,e00 Employees General Medicine Division Surgical Division Medical Support Division Administrative Division 135, 0 100,000 90,000 75,000 30 20 20 30 $4,000,000 Total 100 40,000 400, ee 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 What are the benefits of allocating utility costs to the divisions? (Select which of the following statements (is) are true by selecting an "X".) 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