COST REDUCTION TECHNIQUES AND ITS IMPACT OF FINANCIAL PERFORMANCE

Abstract

In any firm there are two functions, namely Production function, Cost function. At the time ofstarting the production firm costs is decided and varies circumstantially. As the production increases the fixed cost remains same but the variable cost increases with increase in the production. There are only two ways to maximize profit of the organization either to increase sale price of product, to reduce cost of product. Cost reduction implies real and permanent reduction in the unit cost of goods manufactured or services rendered without impairing their product suitability for the use intended. The main objective of the study is to evaluate the application of cost control/reduction tools and techniques in manufacturing organizations