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	$	201,000
Equipment depreciation
Insurance
Utilities:
Electricity		Cubic feet of space		35,000
Waste disposal
Water and sewer
Cable TV and phone
Heat
General administration:
Administrator		Budgeted number of employees		231,000
Administrative staff
Office supplies
Community outreach:
Public education		Budgeted dollars of patient billings		51,000
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		16,320			173,400			30			$	2,250,000
Surgical Division		11,220			127,500			20				1,350,000
Medical Support Division		12,240			112,200			20				900,000
Administrative Division		11,220			96,900			30				0
Total		51,000			510,000			100			$	4,500,000

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?