Shubham Limited is in the business of Fashion Designing. It has received an order to deliver 25,000 jackets custom made for ABC Ltd. The cost estimates for producing the jackets is as under:

a) Cloth 2500 reams of cloth @ Rs. 4000/- per ream

b) Threads and other decoration total Rs. 12,50,000/-

c) Labour rate Rs. 500 per hour. Total hours required is 5000 hours

d) Factory overheads Rs. 8,00,000/-

e) Selling expenses (including delivery charges) Rs. 75,000/-

Quote a price per jacket on the following basis:

1. Cost Plus 10% margin on cost

2. Variable cost + 20% margin

3. Target profit of Rs. 200 per jacket. Calculate the PV Ratio at that price.

4. Shubham Limited has a good brand following and people are willing to give up to Rs. 2500 per jacket. Shubham prices it at Rs. 2400 per jacket. What is this strategy called?