Final answer:
Under job order costing, the monthly expenses of a project are computed using manufacturing overhead incurred, which includes indirect materials and other indirect costs. Direct materials, direct labor, and applied manufacturing overhead are also relevant cost elements.
Step-by-step explanation:
Under job order costing, the computation of monthly expenses for a project involves using several cost elements. The element that needs to be used for this purpose is manufacturing overhead incurred. Manufacturing overhead includes indirect materials, such as tools and supplies, that are necessary for production but cannot be directly traced to a specific project. It also includes other indirect costs, such as factory rent and utilities.
In addition to manufacturing overhead incurred, other cost elements that may be relevant in job order costing include direct materials issued to production, direct labor, and manufacturing overhead applied. Direct materials include the cost of the materials that are directly used in the production of a specific project. Direct labor refers to the wages and salaries paid to the workers who are directly involved in the production of a specific project. Manufacturing overhead applied is an estimated allocation of indirect costs to a project based on a predetermined rate.