Intended for planners and providers of welfare-to-work and other employment and training programs, this guide explains the steps entailed in conducting a cost analysis. The following topics are discussed in the book's six chapters: use of cost analysis before programs and during their implementation; basics of conducting a cost analysis (issue of perspective, costs, the time dimension); costing out ongoing programs (costs per case versus aggregate costs, data needed, steps in estimating gross costs, conversion of gross costs to net costs); cost analysis of a real Job Opportunities and Basic Skills program and implications of program design for program costs; prediction of costs of programs that have not yet been implemented; and use of cost information in program design, bidding, and budgeting. Appended are the following: summary descriptions and main evaluation findings for selected employment and training programs; assignment rates, average length of stay, participation rates, and unit costs for employment and training activities; and program effects on Aid to Families with Dependant Children recipients. The report contains 20 references and a list of 50 recent publications on Manpower Demonstration Research Corporation projects. Forty-six tables/figures are included. (MN)