Problem 8-7 Computing Break-Even and Margin of Safety (LO2 - CC6, 8) Draaksh Corporation sells premium quality wine for $60 per bottle. Its direct materials and direct labour costs are $11 and $8 respectively per bottle. It pays its direct labour employees a wage of $14 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 $149,200+$17.50x 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 $32,400 per month for sales promotions; additionally, it has decided to offer a sales commission of $3.25 per bottle to its sales personnel. Administrative expenses are expected to be $24,200 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 Annual breakeven sales in units Annual breakeven sales in dollars