When opening a business an owner will have some costs that increase and decrease as production changes for example if birdhouse inc has an increase in orders for birdhouses their need for wood glues paint and labor will also increase what type of cost does this example describe
This example describes variable costs. Variable costs are expenses that change with the level of production or sales, such as materials, labor, and utilities. As production increases, so do these costs, and as production decreases, these costs also decrease.
