In a sell or process further decision, consider the following costs:

1. A variable production cost incurred prior to split-off.

2. A variable production cost incurred after split-off.

3. An avoidable fixed production cost incurred after split-off.

Which of the above costs is (are) not relevant in a decision regarding whether the product should be processed further?

Multiple Choice

• Only I

• Only III

• Only I and II

• Only I and III