Rocky Mountain General Hospital serves three counties in Colorado. The hospital is a nonprofit organization that...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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 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
Expert Answer:
Answer rating: 100% (QA)
Cost Allocation TableHeres a table that distributes the costs to the hospitals divisions based on th... View the full answer
Related Book For
Managerial Accounting Creating Value in a Dynamic Business Environment
ISBN: 978-0078110917
9th edition
Authors: Ronald W. Hilton
Posted Date:
Students also viewed these accounting questions
-
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...
-
Giant Electronics is issuing 20-year bonds that will pay coupons semiannually. The coupon rate on this bond is 7.8 percent. If the market rate for such bonds is 7 percent, what will the bonds sell...
-
Mount Ranier General Hospital serves three counties in the state of Washington. The hospital is a nonprofit organization which is supported by patient billings, county and state funds, and private...
-
What is the best way to describe automation? developing highly advanced robots that can mimic higher-levelhuman thinking making human workers fully reliant on technology to performtheir job...
-
A beam of light in air strikes a slab of glass (n = 1.52) and is partially reflected and partially refracted. Find the angle of incidence if the angle of reflection is twice the angle of refraction.
-
Which country has most benefited from opening up to free trade and globalization, seeing middle-class incomes rise and lifting over 600 million people out of poverty within the last two decades?
-
As sales manager for a nationwide electrical products distributor, you are about to roll out a new line of electrical products. What method would you use to train the 500 salespeople in your national...
-
Continental Photo, Inc., is a portrait photography company. Alex Riley, a black man, applied for a position as a photographer with Continental. Riley submitted an application and was interviewed. In...
-
Over 5 periods, the arithmetic average return of a portfolio is 1.4%, the geometric average return is 1.012%, and the dollar-weighted average return is 0.577%. What might explain why the...
-
Greyon Inc. operates an active business. Financial statements for the year ended December 31, 2021 report a net income before taxes of $300,000. The following additional information is provided: 1....
-
Matching section (5 points) Latent heat of vaporization Surface tension Capillarity Osmotic potential Pressure potential Previous Cooling Adhesion Air/water interface Solutes Turgor pressure Next
-
What are class rights?
-
In certain provinces and in federal jurisdiction, what happens when the parties do not succeed in making a deal for their first collective agreement?
-
How does title insurance change the tasks that the purchasers lawyer must complete? Discuss the consequences of title insurance.
-
What is a proxy? How are proxies appointed?
-
Why was it difficult before the passing of the Workers Compensation Act for an employee injured at work to obtain a remedy against her employer?
-
A leaking faucet drips 1 drop per second. If there are 76,000 drops of water in a gallon, how many gallons would the faucet drip in a year?
-
(a) Explain why the concentration of dissolved oxygen in freshwater is an important indicator of the quality of the water. (b) How is the solubility of oxygen in water affected by increasing...
-
Badlands, Inc. manufactures a household fan that sells for $40 per unit. All sales are on account, with 40 percent of sales collected in the month of sale and 60 percent collected in the following...
-
Why do many managers prefer variable costing over absorption costing?
-
The management of Tri-County Air Taxi, Inc. is considering the replacement of an old machine used in its helicopter repair facility. It is fully depreciated but it can be used by the corporation...
-
What does the Richter scale measure?
-
Where do earthquakes occur?
-
Why do earthquakes produce seismic waves?
Study smarter with the SolutionInn App