I need help with Chapter 8, Problem 9P from the book Accounting for Decision Making and Control. The provided resolution for the problem is not clear. Thank you.

Update: see below as requested

Two genetically engineered enzymes are produced simultaneously from a series of chemical and biological processes: Q enzyme and Y enzyme. The cost per batch of Q and Y enzymes is $200,000, resulting in 300 grams of Q and 200 grams of Y. Before Q and Y can be sold, they must be processed further at cost of $100 and $150 per gram respectively. Each batch requires one month of processing time and only one batch per month is produced.

The monthly demands for Q and Y depends on the price charged. The following summarizes the various price-quantity combinations.

Qty sold price per gram Q Price per gram Y

50 $1200 $750

100 1100 550

150 1000 350

200 900 150

250 800 n.a.

300 700 n.a.

In the flowing analysis the optimum price of Q is $900 per gram and Optimum price of Y is $750 per gram

Qty sold price per Q revenue per Q total cost of Q total profit Qty sold price per Y Revenue from Y Total cost Y Total profit

50 $1200 $60,000 $25,000 $35000 $750 $37,500 $27,500 $10,000

100 1100 110,000 50,000 60,000 550 55,000 55,000 0

150 1,000 150,000 75,000 75,000 350 52,500 82,500 (30,000)

200 900 180,000 100,000 80,000 150 30,000 110,000 (80,000)

250 800 200,000 125,000 75,000 n.a.

300 700 210,000 150,000 60,000 n.a.

Required

Critically evaluate the analysis underlying the pricing decisions of $900 for Q and $750 for Y

What should management do if the cost per batch rises to $225,000