Sample Essay
The usage of the utilities like coal, gas and electricity used to drive the manufacturing process of manifold would also be eliminated as an expense. Therefore the overhead associated with this expense would also be significantly reduced. On the other hand the wages of the no production employees and the benefits provided to them might not decrease. Any decrease in this overhead would be minimal as the non production employees are not greatly impacted by the outsourcing of a production line as opposed to the production associated employees and personnel.
Similarly the deprecation conducted on the property and the taxes would not reduce and can remain stable as the property is shared by all product lines and as long as the other two product lines are operating, the depreciation overhead would still occur at the same rate.
The expenses related to constant personnel for the training, travel, and union representation would also considerably reduce as the number of personnel employed will decrease with the outsourcing of the manifold product line. The project expense of the setup and arrangement of new equipment and machinery would not be a reducing overhead as this expense is effect by purchase of new equipment and not by the operation of a product line.
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