Modeling of variation propagation in multistation assembly processes is crucial in predicting product dimensional quality and general performance of manufacturing systems. Based on the state space modeling, this paper develops a variation propagation model, which can be applied for analysis of various tolerances such as size tolerance, bonus tolerance, floating tolerance, etc. The nonstationary tolerance/variation (varying variance) caused by bonus tolerance and floating tolerance is properly handled by the proposed method. Thus, by using the developed variation propagation model, the variations on key product characteristics (KPCs) can be accurately predicted. This enables broad applications of the proposed method in actual manufacturing processes. The results of the case study also validated the proposed model.