Jay One Co. has three production departments (Milling, Forming and Assembly) and two service departments (Stores and Maintenance). The milling and forming departments are machine intensive and the assembly department is labour intensive. During the period, the following allocated overheads were recorded: Allocated Milling Forming Assembly Stores Maintenance Indirect $4,000,000$2.500.000$3,000,000 $850,000 $620,000 Material Indirect $2,000,000 $1,200,000 labour 0,000 $780,000 The management accountant also provided you with the following unallocated costs: Heat and lighting $4,500,000 Rent and rates $3,200,000 Plant insurance $2.200.000 The following bases below were presented by the production manager and you are to choose the most appropriate basis to apportion the unallocated costs. Basis Milling Forming Assembly Stores Maintenance Floor area (m2) 250 300 200 125 125 Plant values 270,000 540,000 337.500 135,000 67,500 Maintenance hours 320 240 160 80 Stores requisitions 250 350 450 www 200 Machine hours 300,000 450,000 150,000 Labour hours 100,000 150,000 200,000 The cost of the direct material is $1,900, the labour rate is $40 per hour (the job took 15 labour hours). A 25% margin is applied on each unit to arrive at the selling price. The machine hours for milling and forming were 12 and 10 respectively. Note: Marks will be awarded only for choosing the most suitable basis.