
The Intense competition and pressure from customers to reduce prices has forced many companies to reduce their costs to survive. The cost must be reduced earlier in the product life cycle, particularly while the product is in the planning and design stages. But in this case study we have found stages after launch of product in the market to reduce the price. Few more factors which influence the cost of products and are determined by various cost allocation methods. Cost Allocation method is the process used to assign costs to production or services. When assigning costs to production and/ or service activities it is important to know whether the cost is a direct or an indirect cost. This will let the management of the concern know how to deal with the particular cost. The treatment of direct costs will be different from the treatment of indirect costs or overheads. Direct costs such as direct material, direct labor are used to make specific product or service. The term cost tracing is used to describe what happens when it is possible to assign a cost directly to a specific product or service. An example of this would be the wood. It is possible to calculate how much wood was used to make a desk or a chair. But, indirect costs or overheads benefit several products or services and cannot be traced directly to a specific product or service. An example of this would be the wood glue that is used to manufacture the tables, chairs and desks. It is hard to say exactly how much glue was used in making tables, chairs and desks. So, another method of allocating such costs to products that used the glue must be found. Such methods are referred to as cost allocation methods. These methods are used when it is not possible to say exactly how much of a particular resource has been used to make a particular product or service. Since it has been acknowledged that the cause of a product should be taken into consideration while planning and strategy that is before actuating the production. In this research paper we have studied how to reduce cost of a product after production, and factors taken into picture for the cost reduction. When an organization launches a product in the market, it starts reflecting the demand and position of a product in competition. And also for an effective cost of a product after a particular time it is necessary to forecast the demand of the product in the market by various forecasting techniques. Forecasting leads to compute the amount of production to be done so that, organization buy adequate amount of raw materials which reduces the cost of storing and maintaining. Similarly as the virtual demand is a computed organization start with the production and delimit it according to the demand which helps in reducing the cost of inventory and which further leads to reduce the cost of the product. Reduced cost in the market may increase the demand of the particular product which makes out maximum profit. Since we have focused the right time to make out a survey in the market and to analysis the demand and accordingly start the production and delimit various factors to abate the price of a product.