Cost analysis is process of evaluation of an undertaking. It serves as an important tool for efficient decision making and control. The term of cost analysis came into existence due to need and urgency of the business managers to investigate into the in he rent causes of frequent variations in cost and profit. The actual earning of a concern may differ from the expected or budgeted earning on account of variation in demand, selling price, production, cost productivity, severely of competition and government legislations etc. Cost analysis examines the relationship of cost and profit to the volume of business to maximize profit. There may be a change in the level of production due to many reasons, such as competition, introduction of a new product, trade depression or boom increased demand for the product, scarce resources, changes in selling prices of products etc. Cost analysis as a technique is used to determine whether a particular project is worthwhile, to choose between alternative projects, or as a guide to the timing of Individual projects.

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Keywords: Cost Analysis, Cost Productivity, Selling Price.