Analisis biaya ekonomi

Cost analysis, litigation risk ethics. forever young (FY) is a devision of a large cosmetics company. It formulates and sells creams and lotions for toning and tightening facial skin. FY’s scientists have developed Enhance, a drug that must be injected by a doctor and lasts for two three months. Patients are not likely to be price-sensitive and therefore would be willing to pay the doctor $300 per treatment.
Sam Nash, Enhance’s VP of marketing, has found a subcontractor who will produce Enhance to FY’s exacting standards for $100 per treatment. FY plans to mark up each dose by 20% and sell it to physicians for $210. Amy Keely, the CEO, feels that Enhance is a thoroughly researched wonder drug and at these prices, it will be popular with doctors and their patients and will reverse the sagging division fortunes. Nash, who had previously been controller of FY, points out that the litigation risk from Enhance is greater that from FT’s other products. He estimates that the potential litigation cost amount to $110 per treatment. He suggests that the factor that cost into the upcoming presentation on Enhance to the board of director, but Keely forbids it.
1. Why might Amy Keely prevent Sam Nash from including the cost of potential litigation in the presentation of Enhance’s economics and pricing?
2. If FY set prices by adding 20% to the total cost and the litigation cost were included, how much would FY charge doctors for a single shot of Enhance? How would that affect doctor’s gross margins? How might this price affect the promotion of Enhance?
3. Nash discovers that FY may be able to purchase insurance to reduce its own litigation risk on Enhance. If FY wants doctors to enjoy a minimum gross margin of 40% and FY itself has a firm 20%-markup policy, what is the maximum per treatment litigation cost it would be willing to pay?
4. Keely tells Nash to stop worrying about a ”mythical litigation issue” and get back to work on making Enhance a blockbuster treatment of choice. What should Nash do now?