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 2022 is 8000. Budgeted fixed manufacturing overhead costs are €480 000.

Actual variable manufacturing overhead costs for March 2022 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 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?