McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 40

Spartan Corporation, a U.S. company, manufactures green eyeshades for sale in the United States and Europe. All manufacturing activities take place in Michigan. During the current year, Spartan sold 10,000 green eyeshades to European customers at a price of $10 each. Each eyeshade costs $4 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 eyeshades.
a. Spartan ships its eyeshades F.O.B., place of destination.
b. Spartan ships its eyeshades F.O.B., place of shipment.