• Variable overhead costs include first line supervisors wages, costs of set up labour, scrap and rework

costs, fringe benefits cost for all labourers

• Fixed overhead costs include depreciation, utilities, salaries and fringe benefit costs of employees
performing support activities

Varying Set up times

• Each plant varies widely in the number of product families and product models
• Varied complexity across products manufactured
• Different product families required different routings through manufacturing and assembly areas
• A product family might contain 15-20 product models each requiring different tooling and set ups
Utilities
• Varies depending on complexity of production, size of plants etc.
• Outdated and underperforming machines lead to higher consumption of electricity.
• Plants like Pontiac had constantly sprinkling leaks at water systems
Return on Assets
• Return on assets was significantly higher for newer plants
• This might indirectly lead to varying cost of rework and scrap
• With outdated machine tools and processes, return on assets will be lower leading to higher cost of
rework and scrap
Varied Fringe benefits across plants
• General trends show that overhead costs
increases with increasing number of product
families.
• Pontiac with highest number of product
families experiences highest total overhead
burden rate
• Lebanon and Maysville with minimum product
families experience least overhead costs