Heat oven to 350°F.

Place paper baking cup in each of 24 regular-size muffin cups.

In medium bowl, mix 2¾ cups flour, the baking powder and salt.

In large bowl, beat ¾ cup butter with electric mixer on medium speed 30 seconds.

Gradually add granulated sugar, ⅓ cup at a time, beating well after each addition.

Beat 2 minutes.

Add egg whites, a little at a time, beating well after each addition.

Beat in 2½ teaspoons vanilla.

Alternately add flour mixture and 1¼ cups milk, beating on low speed just until blended.

Toss baking chips with 1 teaspoon flour; stir into batter.

Divide evenly among muffin cups, filling each two-thirds full.

Bake 20 to 23 minutes or until toothpick inserted in center comes out clean.

Cool 5 minutes; remove from pans to cooling racks.

Cool completely, about 30 minutes.

In large bowl, beat powdered sugar and ⅔ cup butter with electric mixer on low speed until well blended.

Add 1 tablespoon vanilla, the food color and 3 tablespoons milk; beat until smooth and creamy.

Stir in additional milk, 1 teaspoon at a time, until desired consistency.

Spoon frosting into decorating bag fitted with large #1 star tip.

Pipe a swirl of frosting on top of each cupcake.

On 12-inch serving plate, arrange 9 of the cupcakes.

On top of cupcakes, stack three more layers—6 cupcakes, 5 cupcakes and 3 cupcakes—with 1 cupcake on top, to form tree.

Decorate with candies and sprinkles.