Burns Corporation
Information Relating to the Current Operations of Burns $\$ 120,000$

question 49

Essay

Burns Corporation
Information relating to the current operations of Burns Corporation follows:
Sales                                                                         $\$ 120,000$
Variable costs                                                          $\underline{(36,000)}$
Contribution margin                                                  $84,000
Fixed costs                                                            $\underline{(70,000)}$
Profit before taxes                                                  $\underline{\$14,000}$
Refer to Burns Corporation.Compute Burns's degree of operating leverage.

---

Definitions:

Trading Securities

Financial assets bought and sold for short-term profit, often including stocks and bonds.

Fair Market Value

The price that property would sell for on the open market between an informed and willing buyer and seller.

Cost

The amount of money that is incurred in the production of goods or in providing services, which may include expenses related to materials, labor, and overhead.

Accrued Interest

Interest that has been incurred but not yet paid, often relating to bonds or loans.