How much honey you use depends on lots of variables. First, you should decide what yeast you're going to use and check its alcohol tolerance (check out the yeast table). Then you'll want to figure out what SG would give you about that much alcohol (or less)--use the mead calculator. You can then use the calculator to estimate how much honey you'd need to achieve that SG, though it will only be an estimate. Add honey to water until your desired SG is reached, and away you go!
Rough estimates: OG of 1.100 will go dry with just about any wine yeast and proper yeast nutrition. That's about 2.5 lbs of honey in a gallon, I think. You can add less honey and end up with a less strong mead. Or you can use a more alcohol tolerant yeast (K1V or EC-1118 for examples) and push your OG up to 1.120 or more and still have a dry mead.
$60/gallon seems a little expensive, but if it's really awesome honey then don't feel bad.
