To help Alaska's residents determine school operating costs, the adjustment factors that compensate for the impact of school size and geographic location on school operating costs are presented. The text is not intended to determine the cost of basic educational need, but rather to allocate an amount of Basic Need as defined by legislative appropriation. Basic Need is not the amount of money required to meet some qualitative measure of educational services; it is simply the amount of money the legislature appropriates to provide basic education to students. The study did not address local contributions, federal impact aid, categorical aid, or other factors that affect the amount of state aid allocated to each school district. The study identifies three categories of school costs (instruction, nonpersonal services, and administration) and analyzes them separately, because responses to size and geographic location vary. Costs were placed into two groups: school-level costs (instruction) and district-level costs (nonpersonal services and administration combined) to simplify the analysis. A technical appendix features graphs of school-size categories, size adjustment impact, costs, and other information. (RJM)