COMPREHENSIVE PROBLEM ARA Skin Care, Inc. was incorporated on July 17, 2000, primarily to engage in the business of aesthetic and dermatological services. The Company's principal ofce address is Maharlika Highway, Daang Sarile, Cabanatuan City 3100 Nueva Edia. Throughout the years, the ever- evolving eld of Cosmetic Dermatology has continued to be a relentless pursuit of novelty and innovation of the Company. The company nancial statements have been prepared under the historical Cost basis and are presented in Philippine peso, the Company's functional and presentation currency. All amounts are rounded to the nearest peso, eXCept as otherwise indicated. On March 31, 2021, the CEO of ARA Skin Care, Inc. has asked you to participate in a project study that will launch a new product called \"Dennacare\". The projected income staternent for the following period, without the new procedure, appears as follows: Projected Income Statement {0005 omitted} Net sales P600000 Variable cost of sales: Materials P250,000 Labor 80,000 Factory overhead 30,000 360,000 Manufacturing margin 240,000 Fixed overhead 20,000 Gross prot P220000 Operating expenses: Distribution 60,000 Selling and delivery 70,000 Marketing 36,000 General and administrative 24,000 190,030 Prot before tax P30,m0 Provision for income tax 9,030 Prot after tax [321,000 The following information were made available by a team composed of marketing, production, finance, legal, human relations, and other key members of the management: a. Based on the market research conducted, the optimum introductory price for \"Dermacare\" is P250 per product and about 30,000 products can be sold at this price in the coming period. b. \"Dermacare\" non-fixed product cost will have the same rate of variability to net sales as the old product. g. h. Procedure of \"Dermacare\" will require new equipment and additional manpower, hence, fixed manufacturing overhead is expected to increase by 20%. The same selling and delivery facilities will be used. Thus, this expense will increase only by 4%. Distribution costs will remain unchanged because the new product will not require new investments on equipment and distribution centers. \"Dermacare\" should enter the market with a big bang. This will require heavy spending in marketing, although it will require heavy spending in marketing, although it will be limited to 10% of the net sales from "Dermacare". The new product will require additional general and administrative costs of P1,000,000. Analysis of cash ows show favorable results. Scenario(s): o If the company's minimum acceptable rate of return on sales for the new product is 5%, the \"Dermacare" product will be implemented, what is number of units to be sold is at least? 0 If the maximum number of units in \"Dermacare\" relevant range is the excess production capacity of the company, what is the new product's projected prot before tax with sales of 25,000 units? Budgeted production capacity 450,000 units Normal production capacity 400,000 units Actual production capacity 350,000 units