McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

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Falmouth Kettle Company, a U.S. corporation, sells its products in the United States and Europe. During 2011, selling, general, and administrative (SG A) expenses included:
Falmouth had $12,000 of gross sales to U.S. customers and $3,000 of gross sales to European customers. Gross profit (sales minus cost of goods sold) from domestic sales was $3,000 and gross profit from foreign sales was $1,000. ApportionFalmouth's's SG A expenses to foreign source income using the following methods:
a. Gross sales.
b. Gross income.
c. If Falmouth wants to maximize its foreign tax credit limitation, whichmethod produces the better outcome