Draaksh Corporation sells premium quality wine for $105 per bottle. Its direct materials and direct labour costs are $20 and $11.50 respectively per bottle. It pays its direct labour employees a wage of $23 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 = $153,700 + $22.00x

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 $34,200 per month for sales promotions; additionally, it has decided to offer a sales commission of $5.50 per bottle to its sales personnel. Administrative expenses are expected to be $25,100 per month.

Required:

1.	Compute the expected total variable cost per bottle and the expected contribution margin ratio.

2.	Compute the annual break-even sales in units and dollars. (Round your intermediate and final answers to the whole number.)

3.	Draaksh has budgeted sales of $8.6 million for the next fiscal year. What is the companys margin of safety in dollars and as a percentage of budgeted sales? (Round your intermediate and final answers to the whole number.)