Question
Download Solution PDFA company proposes to introduce a new product in the market. The company wants to maintain P/V Ratio at 25%. If variable cost of the product is Rs. 300, what will be the selling price?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFPV Ratio = (Sales - Variable Cost) / Sales
0.25 = (Sales - 300) / Sales
0.25 Sales = Sales - 300
Sales - 0.25 Sales = 300
0.75 Sales = 300
Sales = Rs. 400.
Therefore, if a company proposes to introduce a new product in the market. The company wants to maintain P/V Ratio at 25%. If the variable cost of the product is Rs. 300, the selling price will be Rs. 400.
Last updated on Jun 12, 2025
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