I like the cost calculations but margins too don't necessarily run in a linear way. 33% at £300 but perhaps as low as 10% on the £150 pile them high and sell them cheap BSO. So £15 which means £60 or closer to half the £300 bike. Perhaps cheaper fixed overheads due to less marketing, more automation and due to higher number of units shipping per unit too. Suddenly the £150 bike is more profitable.
All this is purely hypothetical as I bet nobody on here has worked for BSO manufacturers to know for sure.
Also, who's to say people have any choice between £150 and £300 bikes. I know many for whom it's BSO or nothing and they need something to get to work without an hour walk because they can't afford public transport. It is more than a little elitist and dare I say ignorance of the circumstances that lead some to buy BSOs to try and ban them. I bet it's set up by people with many bikes to choose from and a nice middle class income to afford them.