Cost of production per unit is the cost
associated with production divided by the numberof units produced. The difficulty
in calculating the cost of production is usually thoughtto be in assembling all the costs
associated with production and there are volumeswritten about the correct procedures. However, the question of the
relationship of thecost of production to the price of the product is seldom discussed. One reason for thisis the relationship seems very straightforward. In single product enterprises, the cost ofproduction can be compared directly to the price of the product, regardless of themethod used to calculate the cost of production.Determining the relationship between cost of production and the product’s price in jointproduct enterprises is more difficult. A joint product enterprise in one in which two ormore products are produced from one production practice and the costs associated withthe production of each individual product can not be measured with existing information.This paper will look at some methods commonly used to calculate the cost ofproduction. The pros and cons of each method will be discussed. The conclusion willargue for the use of one method, when an enterprise produces joint products.