METRICS EXERCISE 1: LEAVENS LEGGINGS Leavens Leggings is evaluating the feasibility of manufacturing a new line of leggings for young girls aged 4 to 6 in Canada. This product has had good response based on recent social media video campaigns conducted using Facebook, Instagram and YouTube. These campaigns were targeted at the young girls' mothers. The market demand for young girls' leggings has grown by 5% a year for the past 6 years Fixed costs associated with these new leggings are estimated to be $2 million annually for Leavens. Leaven's market research analyst believes the ideal selling price should be $13/unit. Leaven's variable costs will be 85% of selling price. There are three competitive products in Canada in 2018. Current total annual sales in Canada for this product are $41 million. There are three competitors now in this market. Leaven's would be the fourth The first competitor prices their product at eight dollars per unit and they have 35% of the market currently. The second competitor prices their product at $11 per unit and they have approximately 25% market. The final competitor prices their product at $17 per unit they have 40% of the current market. Questions: 1) What is Leaven's unit contribution? 2) How many units per year would they have to sell to breakeven? 3) What would be their breakeven sales level for their first year? 4) What percent of the total market is their breakeven level? 5) Should Leavens go ahead with this new line of leggings? Yes or No? Give two reasons for your