Cost-income studies are designed to serve two functions in instructional program evaluation. First, they act as the indicator of the economic value of a program. This economic value in conjunction with the other educational values needed in program evaluation allow for the most realistic appraisal of program worth. Second, if the studies show a program to be loss-producing, the constraints used in the study and the elements of the study itself often indicate prescriptive measures for program health. This document examines some of the methods and problems of conducting cost-income studies. Before a cost-income study begins, there should be an agreement with users as to the time frame of the study, the definitions of the elements of the study, and the general methodology. Income elements should include student income, a state support, and any other definable income. Expenses should include direct costs, department and college-wide overhead, cost of equipment, and depreciation. All cost data included in income and expense items should use only the monies of the general current funds of the college, and not federal or nonrecurring funds. Appendix A of this document gives an example of a cost study of a hypothetical program. Appendices B and C provide examples of cost-income formulas. (NHM)