Golden State Elixirs' tinctures are produced in four steps: extraction, blending, testing, and bottling.

The first step is the extraction of cannabis oil from cannabis buds, also called cannabis flower. Only the buds contain the active ingredients. Golden State Elixirs has developed a propriety extraction technology that leaves minimal chemical byproducts in the oil. The purer the oil, the fewer potential side effects from the medicine.

Depending on the cannabis strain, 8 oz. of cannabis flower costs between US$300 and US$900, with an average cost

of US$460. For each 8 oz. of cannabis flower, the propriety process uses US$35 of materials. Depending on the strain, the extraction process generates between 3 and 14 oz. of cannabis extract, with an average of 8 oz. of cannabis extract.

The second step is blending. Different cannabis strains have different effects. For example, AC/DC reduces pain, chocolate catatonic alleviates anxiety, and critical kush helps with insomnia. The master blender, Akasha, combines

the extracts from several strains to make tincture with the required effect. While each tincture is a blend, she always generates 8 oz. of the combined extracts. The 8 oz. of cannabis extract are mixed with 52 oz. of medium

chain triglycerides (MCT) oil to generate 60 oz. of tincture extract.10 A 64-oz. bottle of MCT oil costs US$26.

Once the blending is complete, the tincture batch is tested for levels of the two active ingredients: cannabidiol (CBD) and tetrahydrocannabinol (THC). The testing results are then added to the generic label. Testing costs US$60 for each set of 60 bottles.

The final step is bottling, labeling, and packing. One oz. of tincture mixture is poured into each bottle. The bottles are

wiped, a dropper inserted, and a label added. Tinctures are then placed into boxes that hold 10 bottles. Bottles and stoppers cost US$0.25 each, while labeling costs US$0.40 a bottle. Each box costs US$1.25. A box filled with completed tincture bottles is termed a case.

There are several monthly fixed costs. Rent is US$400, amortization of tools is US$350, and marketing (i.e., website, t-shirts, magnets) costs US$250.

While different products have different prices, on average, a bottle of tincture sells for US$30.

The owners of Golden State Elixirs do not currently charge for labor. Their process takes about 10 hours to make a batch of six cases.

• Table 1: Golden State Elixirs Sales for 2017
• Month Sales in Cases
• January 5.0
• February 5.1
• March 5.4
• April 7.5
• May 7.7
• June 7.6
• July 10.0
• August 10.5
• September 12.3
• October 12.8
• November 13.0
• December 13.7

Please tell me variable cost per batch and fixed cost (with explanation)

calculate the breakeven number of cases for 2017.