assuming you have conversion tracking installed - seems you do, run a search query report with atleast 4 weeks data to see which keywords are/are not delivering conversions, you can pause those that are not performing, and perhaps break out the good performers into their own ad groups tata_capl's advice on negative keywords is also a great idea vdaniel80 also has a good point to make sure your landing page is designed to convert not avert
It involves a lot of steps. Eg. from keyword research, writing the compelling ads to building a good quality landing page will help you to reduce cost. But it is also essential that your offer is an irresistible one plus your copy on your landing page is compelling.. These all factors will help you to reduce the cost overall and increase the sales overall.
First, you'll want to optimize your matching and keywords. Take a look at the impressions for your keywords, are their certain ones that have huge numbers of impressions but no click throughs? If so, I'd pause them ASAP, its killing your CTR. Next, setting keywords to exact match tend to have higher CTR since they're searching for what you're offering. Next, you'll want to test your ad copy. Start with a lot of variation, maybe 6 different ideas. Be sure in the settings that they are set to run evenly, not optimized for top performers (you want them to have an even playing field so you can pick the winners). As you see the response, cut the one's with a bad CTR and make new variations of the ones that have a high CTR. Over time, this will greatly increase your CTR on your ads. When you AdWords stuff is in line, make sure that your page actually converts. You'll want to use similar testing tactics, with A/B tests using Google website optimizer. Much more to it, but that'll get you started. Good luck