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.

Shown below are the amounts of each cost allocation base associated with each division.

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?

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 Cost Allocation Base Annual Cost Square feet of space $209,000 Cubic feet of space 43,000 Cost Pool Facilities: Building depreciation Equipment depreciation Insurance Utilities: Electricity Waste disposal Water and sewer Cable TV and phone Heat General administration: Administrator Administrative staff Office supplies Community outreach: Public education School physical exams Budgeted number of employees 239,000 Budgeted dollars of patient billings 59,000 Cost Allocation Base Annual Cost Square feet of space $209,000 Cubic feet of space 43,000 Cost Pool Facilities: Building depreciation Equipment depreciation Insurance Utilities: Electricity Waste disposal Water and sewer Cable TV and phone Heat General administration: Administrator Administrative staff Office supplies Community outreach: Public education School physical exams Budgeted number of employees 239,000 Budgeted dollars of patient billings 59,000 Cost Pool Division Allocation Base Percentage of Total COSTS Distributed Facilities sq. ft. % General Medicine Surgical Medical Support Administrative Total 0 sq. ft. 0.00 % $ 0 Utilities General Medicine cu. ft. % Surgical Medical Support Administrative Total O cu. ft. 0.00 % $ 0 General administration empl. % General Medicine Surgical Medical Support Administrative Total 0 empl. 0.00 % $ 0 Community outreach General Medicine billings % Surgical Medical Support Administrative Total $ o billings 0.00 % $ 0 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 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 divisi OThe number of employees in each division. This base would be more reflective of the actual contribution of each division to the program. nmunity outreach costs to the hospital's divisions, what would be the best allocation base? costs for which work has been done for the program. ies. This base would be more reflective of the actual contribution of each division to the program. actual contribution of each division to the program. 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. 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 Cost Allocation Base Annual Cost Square feet of space $209,000 Cubic feet of space 43,000 Cost Pool Facilities: Building depreciation Equipment depreciation Insurance Utilities: Electricity Waste disposal Water and sewer Cable TV and phone Heat General administration: Administrator Administrative staff Office supplies Community outreach: Public education School physical exams Budgeted number of employees 239,000 Budgeted dollars of patient billings 59,000 Cost Allocation Base Annual Cost Square feet of space $209,000 Cubic feet of space 43,000 Cost Pool Facilities: Building depreciation Equipment depreciation Insurance Utilities: Electricity Waste disposal Water and sewer Cable TV and phone Heat General administration: Administrator Administrative staff Office supplies Community outreach: Public education School physical exams Budgeted number of employees 239,000 Budgeted dollars of patient billings 59,000 Cost Pool Division Allocation Base Percentage of Total COSTS Distributed Facilities sq. ft. % General Medicine Surgical Medical Support Administrative Total 0 sq. ft. 0.00 % $ 0 Utilities General Medicine cu. ft. % Surgical Medical Support Administrative Total O cu. ft. 0.00 % $ 0 General administration empl. % General Medicine Surgical Medical Support Administrative Total 0 empl. 0.00 % $ 0 Community outreach General Medicine billings % Surgical Medical Support Administrative Total $ o billings 0.00 % $ 0 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 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 divisi OThe number of employees in each division. This base would be more reflective of the actual contribution of each division to the program. nmunity outreach costs to the hospital's divisions, what would be the best allocation base? costs for which work has been done for the program. ies. This base would be more reflective of the actual contribution of each division to the program. actual contribution of each division to the program. 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