You are the accounting manager for a Canadian company, Friendly Patio Furniture Inc. (FPFI). The company is based in Ottawa, Ontario, and it sells patio furniture made from environmentally sustainable materials. The company has grown rapidly since its incorporation in 2012 and now has over 80 employees and production plants in British Columbia and New Brunswick. The head office and the research and development centre are all located in Ottawa. Both plants make all of the companys products, with the majority of the products being shipped from the BC plant to western North American customers and most of the products shipped from the New Brunswick plant shipped to eastern North American customers. One plant may ship to the other plants normal geographic regions when there are capacity issues in meeting surges in demand. All shipments are made directly to customers from the plants. The retail price of the companys products range from $1,000 to $5,000. FPFI sells to retailers across North America. It has over 100 customers in various markets. Each year, it has been successful in finding new retailers and markets for its products based on significant social media spending and strong word of mouth referrals from current customers. Generally, the retailers mark up the cost of the products purchased from FPFI by varying percentages depending on competitor pricing and product positioning. FPFI provides suggested retail pricing as shown in the tProducts data file. FPFI bills the wholesale price to customers. Products are shipped to customer sales locations. Some major customers have master accounts which allow them to negotiate better prices. These are referred to as Chains in the customer file, while non- chain customers are Independents. Chain customers have all invoices sent to their central accounting departments while independents have their invoices sent to the delivery address. Sales are relatively consistent over the months of the year except for a spike in demand before the spring patio season. The 4 sales people based in BC sell to customers in Western North America and they report to the Western sales manager in BC. Similarly, 4 sales people based in NB report to the Eastern Canadian sales manager based in New Brunswick and sell to the Canadian Maritime provinces and the USA Northeast. The remaining 9 sales people are based in the Ontario head office and report to the director of sales and marketing who works out of the head office. They sell to customers in Ontario, Quebec and the central USA. All salespeople travel extensively. When they go to the USA, they visit customers and discuss product trends with customers and future products. All contracts for sales are negotiated and finalized by the appropriate sales managers/director of sales and marketing in Canada. The companys IT, purchasing, finance, administration (including payroll) and executive functions are based at the companys head office in Ontario. Salespeople visit their home location at least once every two weeks, and work from home the rest of the time that they are not traveling to visit customers. Salespeople do not have any products at their homes, no customers visit their homes and they do not have any company identifying information located at their home offices.

The company has a December 31 year end. The companys federal taxable income for 2022 has been correctly calculated as $480,000. You are now preparing the information needed to determine the allocation of salaries and wages and gross revenues to permanent establishments of the company (PEs) for the companys 2022 taxation year. Assess the situation, identify the issues and analyze the issue according to the income Tax Act and Crisp-DM method