TY - JOUR
T1 - An empirical analysis of manufacturing overhead cost drivers
AU - Banker, Rajiv D.
AU - Potter, Gordon
AU - Schroeder, Roger G.
PY - 1995/2
Y1 - 1995/2
N2 - Empirical validity of the claim that overhead costs are driven not by production volume but by transactions resulting from production complexity is examined using data from 32 manufacturing plants from the electronics, machinery, and automobile components industries. Transactions are measured using number of engineering change orders, number of purchasing and production planning personnel, shop-floor area per part, and number of quality control and improvement personnel. Results indicate a strong positive relation between manufacturing overhead costs and both manufacturing transactions and production volume. Most of the variation in overhead costs, however, is explained by measures of manufacturing transactions, not volume.
AB - Empirical validity of the claim that overhead costs are driven not by production volume but by transactions resulting from production complexity is examined using data from 32 manufacturing plants from the electronics, machinery, and automobile components industries. Transactions are measured using number of engineering change orders, number of purchasing and production planning personnel, shop-floor area per part, and number of quality control and improvement personnel. Results indicate a strong positive relation between manufacturing overhead costs and both manufacturing transactions and production volume. Most of the variation in overhead costs, however, is explained by measures of manufacturing transactions, not volume.
KW - Cost drivers
KW - Manufacturing overhead
KW - Overhead costs
KW - Production complexity
KW - Transactions
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U2 - 10.1016/0165-4101(94)00372-C
DO - 10.1016/0165-4101(94)00372-C
M3 - Article
AN - SCOPUS:58149210982
SN - 0165-4101
VL - 19
SP - 115
EP - 137
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
IS - 1
ER -