This study examines the effectiveness of integrating Design-to-Cost (DTC) methodology with Activity-Based Costing (ABC) to enhance cost efficiency in industrial product design. A case study approach is applied to a 120-liter electric heater manufactured by the General Company for Electrical and Electronic Industries in Iraq. The proposed framework evaluates cost reduction opportunities during the conceptual design stage through material substitution, labor optimization, and overhead cost restructuring. A comparative analysis between traditional costing and the DTC-based model is conducted to assess performance differences in terms of cost and resource efficiency. The results show that the optimized design reduces unit cost from 108,965 IQD to 89,098 IQD, achieving a cost saving of 19,867 IQD per unit while maintaining product functionality and quality. The study demonstrates that early-stage cost integration significantly improves resource allocation efficiency and supports more informed engineering decisions. The findings highlight the practical value of combining DTC and ABC as a structured approach for cost-driven product development in manufacturing environments.