Which of the following best describes what is included in the total cost of a job under a job order costing system?

• A. Applied manufacturing overhead and selling expenses
• B. Direct labor and administrative expenses
• C. Direct materials, direct labor, and applied manufacturing overhead
• D. Direct materials and direct labor only

Answer: (C)

Verified step by step guidance

1. Understand the concept of a job order costing system: This system is used to assign costs to specific jobs or batches of products. It is commonly used in industries where products are customized or produced in small batches.
2. Identify the components of total cost in a job order costing system: The total cost of a job includes direct materials, direct labor, and applied manufacturing overhead. These are the three primary cost components in this system.
3. Clarify the terms: Direct materials are the raw materials that can be directly traced to the job. Direct labor refers to the wages of workers who can be directly associated with the job. Applied manufacturing overhead includes indirect costs such as utilities, depreciation, and factory maintenance that are allocated to the job using a predetermined overhead rate.
4. Eliminate incorrect options: Selling expenses and administrative expenses are not included in the total cost of a job under a job order costing system because they are considered period costs, not product costs.
5. Conclude with the correct answer: The total cost of a job under a job order costing system includes direct materials, direct labor, and applied manufacturing overhead, as these are the costs directly associated with producing the job.