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Draaksh Corporation sells premium quality wine for \$85 per bottle. Its direct materials and direct labour costs are \$16 and \$9.50 respectively per bottle. It pays its direct labour employees a wage of \$19 per hour.

The company performed a regression analysis using the past 12 months’ data and established the following monthly cost equation for manufacturing overhead costs using direct labour hours as the overhead allocation base:

y = \$151,700 + \$20.00x

Draaksh believes that the above cost estimates will not substantially change for the next fiscal year. Given the stiff competition in the wine market, Draaksh budgeted an amount of \$33,400 per month for sales promotions; additionally, it has decided to offer a sales commission of \$4.50 per bottle to its sales personnel. Administrative expenses are expected to be \$24,700 per month.

Note: I need help with the blanks. The answers I originally tried are…

annual breakeven pint in dollars: 4,755,495 (55947*85)

margin of safety: 3,444,505 (8200000-4755495)

Required :1 . Compute the expected total variable cost per bottle and the expected contribution margin ratio .Total variable cost\$40Contribution margin ratio53| %02. Compute the annual break- even sales in units and dollars . ( Round your intermediate and finalanswers to the whole number . )Annual breakeven sales in units55, 947Annual breakeven sales in dollars3 . Draaksh has budgeted sales of \$8. 2 million for the next fiscal year . What is the company’s margin ofsafety in dollars and as a percentage of budgeted sales ? ( Round your intermediate and final answersto the whole number . )Margin of safetyBudgeted sales42| %