B. Mitochondria
The process of cellular respiration is essentially when oxygen and carbon transfuse themselves together to create carb on dioxide, which in turns creates energy.
The entire process is formed in the powerhouse of the cell, or in other words, the mitochondria.
A part of this question that may have been confusing is the answer, "lungs". Since respiration is correlated to the lungs, you may have been confused. However, this is a process that occurs within your cells, so on a small scale than your entire body.