Isotropic AS is using an Activity Based Costing model to analyze their various sales and marketing costs. The forecasted costs for sales and marketing in 2021 can be split as follows:

Activities in the Sales and Marketing Dept.	Fixed activity costs	Cost drivers	Available capacity	Budgeted capacity utilization
Customer meetings	1 800 000	No. of customer meetings	900 meetings/year	690 meetings/year
Customer support on phone, mail, and chat	1 200 000	No. of support hours	1 800 support hours/year	1 350 support hours/year
Handling complaints and returns	900 000	No. of customer complaints	600 complaints/year	450 complaints/year
Other costs for sales and marketing	2 100 000	Not available
Total sales and marketing costs	6 000 000

The company sells its products through three retailing chains in Norway and we can gather the following information about the activities pertaining to these:

	Retailer no. 1	Retailer no. 2	Retailer no. 3	Retailer no. 4
Sold number of units	30 000 units	18 000 units	16 000 units	64 000 units
Customer meetings	330 meetings	270 meetings	90 meetings	690 meetings
Customer support on phone, mail, and chat	750 hours	450 hours	150 hours	1350 hours
Handling complaints and returns	240 complaints	180 complaints	30 complaints	450 complaints

Isotropic AS purchases the products from the manufacturer in China for an average purchase price of kr 250.00 per unit (ex VAT) and resell these to the three retailers with an average profit margin of 60.00%. The sales representatives are paid 5% bonus on the sales order values.

Question 2a Calculate the costs of excess capacity in the Sales and Marketing Department in 2021.

Question 2b Analyze the profitability of the three retailing chains using the information you have available.