Helene Corporation owns manufacturing facilities in States A, B, and C. A uses a three-factor apportionment formula under which the sales, property and payroll factors are equally weighted.B uses a three-factor apportionment formula under which sales are double-weighted.C employs a single-factor apportionment factor, based solely on sales.
Helene's operations generated $1,000,000 of apportionable income, and its sales and payroll activity and average property owned in each of the three states is as follows.
Helene's apportionable income assigned to A is:

Question

Helene Corporation owns manufacturing facilities in States A, B, and C. A uses a three-factor apportionment formula under which the sales, property and payroll factors are equally weighted.B uses a three-factor apportionment formula under which sales are double-weighted.C employs a single-factor apportionment factor, based solely on sales.
Helene's operations generated $1,000,000 of apportionable income, and its sales and payroll activity and average property owned in each of the three states is as follows.
 Helene's apportionable income assigned to A is:

Quizplus · Accepted Answer

State A uses an equally-weighted three-factor formula, so each factor gets a weight of 1/3. Therefore, State A's apportionment percentage is:
(1/3)(sales factor) + (1/3)(property factor) + (1/3)(payroll factor) = (1/3)(3/6) + (1/3)(1/3) + (1/3)(2/6) = 0.5
State B uses a sales double-weighted formula, so the sales factor is given a weight of 2/3 and the other factors share the remaining 1/3. Therefore, State B's apportionment percentage is:
(2/3)(sales factor) + (1/3)(property factor) + (1/3)(payroll factor) = (2/3)(1/6) + (1/3)(1/3) + (1/3)(2/6) = 0.222
State C uses a sales-only formula, so its apportionment percentage is simply the sales factor itself. Therefore, State C's apportionment percentage is:
(sales factor) = 1/6
To determine how much income is assigned to each state, we multiply the total income by each state's apportionment percentage. Then, we sum up the numbers to get the total income assigned to all three states. That is:
(0.5)(1000000) + (0.222)(1000000) + (1/6)(1000000) = 311100
Therefore, the answer is C, $311,100.

Helene Corporation Owns Manufacturing Facilities in States A, B, and C