Production workers for Poole Manufacturing Company provided 2,700 hours of labor in January and 1,800 hours in February. The company, whose operation is labor intensive, expects to use 36,000 hours of labor during the year. Poole paid a \($45,000\) annual premium on July 1 of the prior year for an insur¬ ance policy that covers the manufacturing facility for the following 12 months.

Required:

Explain why allocation is needed. Based on this information, how much of the insurance cost should be allocated to the products made in January and to those made in February?