Question

Spartan Corporation, a U.S. company, manufactures green eye shades for sale in the United States and Europe. All manufacturing activities take place in Michigan. During the current year, Spartan sold 12,400 green eye shades to European customers at a price of $12.20 each. Each eye shade costs $5.10 to produce. All of Spartan’s production assets are located in the United States.

For each independent scenario, determine the source of the gross income from sale of the green eye shades.

a. Spartan ships its eye shades F.O.B., place of destination.

apportioned to production activity - us source

apportioned to sales activity - foreign source

b. Spartan ships its eye shades F.O.B. , place of shipment.

Apportioned to production activity - us source

apportioned to sales activity - u.s. source

Answer 1

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