Question 7 Total: 9 marks Drinkable Ltd produces and sells drinking bottles and operates in Nowra, Australia. The company is in the process of analysing its production and non-production costs in order to make its plan for next year. The company has estimated selling price of $60 with the following costs per unit: Direct materials $15.00; direct labour $8.18; Variable Manufacturing Overhead $1.92; Variable Selling expenses $4.90. Drinkable Ltd. also has annual expenses: Interest on loan $9 870; Depreciation of building $22 920; Advertising expense $40 840; and other expenses $4 970. Required (show your working): (3 marks) (a) Calculate the contribution margin ratio and the break-even sales in dollars. (b) Compute the number of units that must be sold to earn a profit before tax of $90,000. (3 marks) (3 marks) (c) If the company is only able to sell 6,500 units of products, how much should the selling price be to obtain a profit after tax of $87,300 with the tax rate of 25%