Final answer:
A cost object can be any item for which costs are measured and assigned, including products, services, projects, or departments. Fixed costs, like rent, are constant, while variable costs, such as labor and materials, fluctuate with output levels.
Step-by-step explanation:
In accounting and cost management, a cost object is referred to as anything for which costs are measured and assigned. Therefore, the correct answer to the student's question is: a. It can be anything for which costs are measured and assigned. Cost objects are not the factors that cause a change in resource usage, costs, and revenues, nor do they have control over target costs or drive cost changes. To elaborate, cost objects can include products, services, projects, or departments.
We can decompose costs into fixed and variable costs when analyzing cost behaviour. Fixed costs such as the rent on a factory or retail space, are costs related to fixed inputs like capital, which do not change in the short run and remain constant irrespective of the level of production. On the contrary, variable costs vary with the level of output and are related to variable inputs such as labor and raw materials. Labor, being a variable cost, adjusts according to the quantity produced, requiring more workers or work hours for higher output.