What it means by "out of it"
Here is the paragraph

Performers ask for inspiration from the audience, such as: "name a person you know, an argument you had within the last 24 hours, and a place you hate," and then the performers make a skit out of it.

Question

What it means by "out of it"
Here is the paragraph

Performers ask for inspiration from the audience, such as: "name a person you know, an argument you had within the last 24 hours, and a place you hate," and then the performers make a skit out of it.

Answer

they make a skit using the information as inspiration.
they make a skit out of the information.
they make a skit out of it.

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