Trayne Corporation's Sales Office and Manufacturing Plant Are Located in State

question 35

Multiple Choice

Trayne Corporation's sales office and manufacturing plant are located in State X. Trayne also maintains a manufacturing plant and sales office in State W. For purposes of apportionment, X defines payroll as all compensation paid to employees, including elective contributions to § 401(k) deferred compensation plans. Under the statutes of W, neither compensation paid to officers nor contributions to § 401(k) plans are included in the payroll factor. Trayne incurred the following personnel costs.
Trayne's payroll factor for State X is:

• A) 100.00%.
• B) 66.67%.
• C) 62.50%.
• D) 50.00%.

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Definitions:

Budgeted Manufacturing Overhead

The estimated total indirect costs related to the production process, planned for a specific period.

Cost Driver

A factor that causes or relates to a change in the cost of an activity or a product, such as machine-hours, labor-hours, or material usage.

Work in Process Inventory

Items or materials that are partway through the production process but not yet completed, representing a current asset on the balance sheet.

Finished Goods Inventory

Items that have completed the manufacturing process and are ready for sale to customers.