Simpkin 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.
Simpkin'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.
Simpkin's apportionable income assigned to B is:

Question

Simpkin 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.
Simpkin'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.
 Simpkin's apportionable income assigned to B is:

Quizplus · Accepted Answer

State A: 
Sales factor = $200,000/$2,400,000 = 8.33%
Property factor = $600,000/$4,800,000 = 12.50%
Payroll factor = $400,000/$1,200,000 = 33.33%
Apportionment = (8.33% + 12.50% + 33.33%)/3 = 18.05%

State B: 
Sales factor = $400,000/$2,400,000 = 16.67%
Property factor = $1,200,000/$4,800,000 = 25.00%
Payroll factor = $200,000/$1,200,000 = 16.67%
Apportionment = (2 x 16.67% + 25.00%)/4 = 19.79%

State C: 
Sales factor = $1,000,000/$2,400,000 = 41.67%
Apportionment = 41.67%

Apportionable income assigned to State B = $1,000,000 x 19.79% = $197,900
Therefore, the apportionable income assigned to B is $458,300 ($1,000,000 - $197,900).

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