2. (45%) The VP Marketing at Big Pharma Inc. was reviewing price and promotion alternatives for Rash-away ointment, a product designed to reduce skin irritation. A sales, price and cost summary for Rash-away is shown below: Rash-away Price per unit $3.00 Variable cost per unit $1.50 Sales volume 1,000,000 units The VP Marketing was considering two options for the product: whether to reduce price by 20% or invest in an incremental $500,000 in advertising. Answer the questions below: a. What is the contribution per unit? b. What increase in unit sales and dollar sales will be necessary to recover the additional expenditure on advertising? c. At the current sales level, what is the total dollar contribution? d. If price is reduced by 20%, what will be: i. the new price? ii. the new contribution per unit? e. If price is reduced by 20%, how many units will Rash- away need to sell in order to generate the same total contribution dollars as before