(C) By breaking down the nutrients of bread outside the body and then absorbing them.
The textbook (Chapter 5, Section 5.2.2) explicitly states: "Some organisms break down the food material outside the body and then absorb it. Examples are fungi like bread moulds, yeast and mushrooms." This is the key fact examiners expect. Options A, B, and D are incorrect — fungi are not autotrophs, do not eat, and do not consume other organisms.
Source: Chapter 5, Section 5.2.2 — Heterotrophic Nutrition