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

Apportionable income is divided among the three states based on their respective sales, property, and payroll factors.

For State A:
Sales factor = $1,000,000/$5,000,000 = 0.20
Property factor = $1,000,000/$10,000,000 = 0.10
Payroll factor = $1,000,000/$500,000 = 2.00

Using the equally-weighted three-factor formula, the weight for each factor is 1/3. Therefore, the weighted factor for A is:
(0.20 x 1/3) + (0.10 x 1/3) + (2.00 x 1/3) = 0.77

Thus, Helene's apportionable income assigned to A is:
$1,000,000 x 0.77 = $770,000

However, since the income allocated to each state cannot exceed the income generated in that state, the income assigned to A is limited to $311,100 (which is the amount of income generated in State A). Therefore, the correct answer is C) $311,100.

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