Question

onestoga Corporation operates manufacturing facilities in State P and State Q. In addition, the corporation owns nonbusiness rental property in State Q. Conestoga incurred the following compensation expenses:

State P    State Q     Total Manufacturing wages $650,000 $450,000 $1,110,000 Administrative wages 340,000 180,000 520,000 Officers' salaries 320,000 100,000 430,000

Sixty percent of the time is spent by the administrative staff located in State Q and 30% of the time spent by officers located in State Q are devoted to the operation, maintenance, and supervision of the rental property. Both states exclude such rent income from the definition of apportionable income.

Round your answers to four decimal places before converting to a percentage. If required, round your final answers to two decimal places.

Conestoga's payroll factor for State P is % and for State Q is %.

Answer 1

Let us calculate everything in % terms first. Based on the information given above we can derive at below table

		Owned	Rented
Description	Total	State P	State Q
Manufacturing Wages	1100000	0.6000	0.4000
Administrative Wages	520000	0.6538	0.3462
Office Salaries	430000	0.7000	0.3000
	Factor	1.9538	1.0462

Hence by apportioning the given information we can determine the factors of state P and Q now by converting the same in percentage terms we can determine the payroll factor as stated below:

Total Factor	3.0000
	A	B	C = A/B
State P	1.9538	3.0000	0.6513	Payroll Factor State P
State Q	1.0462	3.0000	0.3487	Payroll Factor State Q

Payroll Factor

State P = 0.6513 or 65.13%

State Q = 0.3487 = 34.87%