1. Which of the following would be considered in a make-or-buy decision?

A) fixed costs that will still be incurred

B) prepaid rent expense for warehousing finished goods and inventories

C) unchanged supervisory costs

D) potential rental income from space occupied by the production area

2. Which of the following costs is inventoried when using variable costing?

A) electricity consumed in manufacturing process

B) sales commission paid on each sale

C) rent on factory building

D) advertising costs incurred for the product

3. Which of the following costs is inventoried when using variable costing?

A) fixed administrative costs

B) fixed selling costs

C) variable selling costs

D) variable manfufacturing costs