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Draaksh Corporation sells premium quality wine for $130 per bottle. Its direct materials and direct labour costs are $25 and $14.00 respectively per bottle. It pays its direct labour employees a wage of $28 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=$156,200+$24.50x 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 $35,200 per month for sales promotions; additionally, it has decided to offer a sales commission of $6.75 per bottle to its sales personnel. Administrative expenses are expected to be $25,600 per month Required: 1. Compute the expected total variable cost per bottle and the expected contribution margin ratio Total variable cost Contribution margin ratio 2. Compute the annual break-even sales in units and dollars. (Round your intermediate and final answers to the whole number) Annual breakeven sales in units Annual breakeven sales in dollars < Prev 13 of 14 Next
3. Draaksh has budgeted sales of $9.1 million for the next fiscal year. What is the company's margin of safety in dollars and as a percentage of budgeted sales? (Round your intermediate and final answers to the whole number.) Margin of safety Budgeted sales