Final answer:
To calculate the unit product cost using the job cost sheet, add direct labor, direct materials, and manufacturing overhead together, then divide by the number of units produced. Understanding the concept of marginal product helps in analyzing how changes in labor and capital affect the unit product cost.
Step-by-step explanation:
To calculate the unit product cost using the job cost sheet, you should add direct labor to direct materials and manufacturing overhead and divide by the number of units produced. Essentially, the formula to calculate the unit product cost is:
Total Job Cost = Direct Materials + Direct Labor + Manufacturing Overhead
Once you have the total job cost, you divide this by the number of units produced to get the unit product cost:
Unit Product Cost = Total Job Cost / Number of Units Produced
In the context of marginal product, understanding how different inputs impact production levels is crucial. The marginal product is the additional output from adding one more unit of a factor, like labor.
For instance, if the marginal product of labor is high, it implies that adding additional workers significantly increases production, which may lower the unit product cost. On the other hand, if labor costs rise, companies might seek methods to increase efficiency or substitute labor with capital if it's more cost-effective.