Mercy Corporation, Headquartered in F, Sells Wireless Computer Devices, Including

question 19

Essay

Mercy Corporation, headquartered in F, sells wireless computer devices, including keyboards and bar code readers. Mercy's degree of operations is sufficient to establish nexus only in E and
F.Determine its sales factor in those states.
State E applies a throwback rule to sales, while State F does not.State G has not adopted an income tax to date.Mercy reported the following sales for the year.All of the goods were shipped from Mercy's F manufacturing facilities.

Because F has not adopted a throwback rule, the sales to customers in G and to the U.S.government are not included in either state's sales factor.Mercy creates $70 million in "nowhere sales."
E Sales factor = $60 million/$150 million = 40.00%
F Sales factor = $20 million/$150 million = 13.33%

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Definitions:

Labor Cost Variance

The difference between the actual labor costs incurred and the standard labor costs for the actual production achieved; it is used for monitoring labor performance.

Standard Cost

A predetermined cost of manufacturing, purchasing, or using a product or service, used in budgeting and variance analysis.