The correct answer is: D. independent variable and cost driver
The first step in estimating a cost function is to identify the cost object. The cost object is the thing that costs money, such as a product, service, or customer. The second step is to identify the cost drivers. The cost driver is the factor that causes the cost to change. Once the cost object and cost drivers have been identified, the third step is to collect data for the independent variable and the cost driver. The independent variable is the variable that is being changed, and the cost driver is the variable that is being measured.
For example, if you are trying to estimate the cost of producing a product, the cost object would be the product. The cost drivers might be the number of units produced, the type of materials used, or the amount of labor time required. To collect data for the independent variable and the cost driver, you would need to measure the number of units produced, the type of materials used, and the amount of labor time required for each product.
Once you have collected data for the independent variable and the cost driver, you can use statistical analysis to estimate the cost function. The cost function is a mathematical equation that shows how the cost changes as the independent variable changes.