Mondragon SA assembles its CardioX product at its Toledo plant. Manufacturing overhead (both variable and fixed) is allocated to each CardioX unit using budgeted assembly-time hours. Budgeted assembly time per CardioX product is 2 hours. The budgeted variable manufacturing overhead cost per assembly time hour is €40. The budgeted number of CardioX units to be assembled in March 2015 is 8000. Budgeted fixed manufacturing overhead costs are €480 000. Actual variable manufacturing overhead costs for March 2015 were €610 500 for 7400 units actually assembled. Actual assembly-time hours were 16 280. Actual fixed manufacturing overhead costs were €503 420.
Required
1. Conduct a 4-variance analysis (Exhibit 16.3) for Mondragon's Toledo plant.
2. Comment on the results in requirement 1.
3. How does the planning and control of variable manufacturing overhead costs differ from that of fixed manufacturing overhead costs?