A 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, then what will be the selling price?

The correct answer is D. Rs. 400.

The P/V ratio is the ratio of selling price to variable cost. It is a measure of a company’s profitability. A higher P/V ratio indicates that a company is more profitable, as it is able to generate more revenue from each unit of product sold.

In this case, the company wants to maintain a P/V ratio of 25%. This means that the selling price of the product should be 25% higher than the variable cost. The variable cost is given as Rs. 300, so the selling price should be Rs. 300 x 125/100 = Rs. 400.

Option A is incorrect because it is the variable cost, not the selling price. Option B is incorrect because it is half of the variable cost. Option C is incorrect because it is equal to the variable cost.