Question
A company proposes to introduce a new product in the
market. The company wants to maintain the P/V Ratio at 35%. If the variable cost of the product is Rs. 2600, what will be the selling price?Solution
PV Ratio = (Sales - Variable Cost) / Sales 0.35 (Sales - 2600) / Sales 0.35 Sales = Sales - 2600 Sales - 0.35 Sales = 2600 0.65 Sales = 2600 Sales Rs. 4000
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