1. (1) When a direct allocation is not made, salaries, with certain exceptions hereinafter noted, shall be allocated on whichever of the following bases, or combinations thereof, are appropriate:

   Number of items or units

   Time studies

   Overhead on other allocations

   Premiums

   Dollar volume of losses

   Other special studies

2. (2) The effects of the application to each operating expense classification of all bases of allocation shall be shown on records kept in clear and legible form. Such records shall be readily available for examination.

(a) Direct allocations.

Wherever possible, salaries of individuals or similarly employed groups shall be allocated direct to companies, expense groups and primary lines of business. In other words, salaries of employees whose work is solely in connection with a specific company, expense group or primary line of business shall be allocated thereto.

(b) Allocations other than direct.