The correct answer is: C. variable drivers
Variable drivers are cost drivers that vary in direct proportion to changes in the level of activity. They are used to assign costs to cost objects that are directly affected by changes in the level of activity.
For example, the cost of direct materials is a variable driver because it varies in direct proportion to the number of units produced. The cost of direct labor is also a variable driver because it varies in direct proportion to the number of hours worked.
Timed drivers are cost drivers that are based on the amount of time spent on an activity. They are used to assign costs to cost objects that are affected by the amount of time spent on an activity.
For example, the cost of a machine operator is a timed driver because it is based on the number of hours that the operator works. The cost of a supervisor is also a timed driver because it is based on the number of hours that the supervisor works.
Fixed drivers are cost drivers that do not vary with changes in the level of activity. They are used to assign costs to cost objects that are not directly affected by changes in the level of activity.
For example, the cost of rent is a fixed driver because it does not vary with changes in the number of units produced. The cost of insurance is also a fixed driver because it does not vary with changes in the number of hours worked.