The correct answer is: B. cost driver and cost
A cost driver is a factor that causes a change in the cost of a product or service. A cost object is anything for which costs are incurred. For example, a product, a customer, or a department.
In order to adjust costs, it is necessary to have a reliable measure of both the cost driver and the cost. This is because the cost driver is what causes the cost to change, and the cost is what is being adjusted.
For example, if a company wants to adjust the cost of its products, it would need to know the cost driver for the product, such as the number of units produced, and the cost of the product, such as the cost of materials and labor.
The other options are incorrect because they do not provide enough information to adjust costs.
- A fixed cost driver is a factor that causes a change in a fixed cost. A fixed cost is a cost that does not change in total with changes in the level of activity. For example, the rent on a building is a fixed cost.
- A mixed cost driver is a factor that causes a change in both a fixed cost and a variable cost. A variable cost is a cost that changes in total in proportion to changes in the level of activity. For example, the cost of materials is a variable cost.
- An object is anything for which costs are incurred. For example, a product, a customer, or a department.