What happens to the variable costs of a company when it increases its production level?

When a company increases its production level, its variable costs usually go up. Variable costs are expenses that change depending on how much the company produces, such as materials and labor. For example, if a bakery decides to make more cakes, it will need to buy more flour and sugar, which increases its costs. This means that as production rises, the total variable costs also increase because the company is using more resources. However, the cost per item might stay the same or even decrease if the company benefits from economies of scale, meaning it can produce more efficiently as it grows.