Twenty-four expenditure variables were correlated with achievement scores on the Iowa Test of Educational Development to find out how various types of expenditures were related to educational quality. The expenditure variables (instructional cost, operating cost less transportation, and total costs) were used as numerators in a fraction. The denominators were: (1) the number of students enrolled in the district, (2) revised number of students enrolled, obtained by giving more weight to high school students due to higher cost of educating, (3) number of teachers, and (4) revised number of teachers, weighting high school teachers. The statistical analysis of the variables showed that a correlation existed between per-teacher expenditures and composite pupil achievement test scores, and that the three most important measures were instructional cost, operating cost less transportation, and total costs less transportation. No relationship was found between per-pupil spending and achievement test scores. The results suggested that an educational program designed to provide a minimum level teacher expenditure with a satisfactory pupil teacher ratio was a more efficient method of allocating resources than concentrating on a minimum level of per-pupil expenditure. (BC)