Explain the statement: “cells are the basic units of structure and function in living things.”

1. All living things are composed of cells
2. Cells are the basic units of structure and function in living things.
3. All cells are produced from other cells.

To put it another way: 
All living things are made up of cells. 
If we go "higher", less basic, then we have things like organs - but different living things have different organs, and some living things have NO organs (for example: single-celled animals). 
So: 
- we can't say that all living things are made of bodies 
- we can't say that all living things are made of organs 
- but we CAN say that all living things are made of cells 

So: a "cell" is the largest, most complex basic unit of living organisms. That is: a cell is the largest structure that ALL living things are made of. There are smaller structures that living things are made of - atoms, for example - but the cell is the largest, most complex structure that is basic (a sort of "building block") for *all* living things.