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 $5000$ hourd$)$ 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?