This manual is designed to provide guidelines for the analysis of the costs of operating day care centers and not day care homes. Day care is defined as a broad term applied to a variety of programs that shelter preschool and school age children on something less than a 24-hour basis. The guidelines set forth by this manual aim to permit the following performance characteristics: (1) consistent application by day care centers possessing wide variations in bookkeeping sophistication; (2) enough flexibility to be applicable to centers operating at different hours, days, weeks, and months during a year, (3) isolation of significant differences in operating patterns, (4) separation of core costs from exogenous costs, (5) evaluation of the internal management and efficiency of day care centers, (6) development of accurate and detailed cost comparisons between day care centers, (7) application to other types of child care arrangements, (8) accumulation of normative data on the costs of operating day care centers, (9) an examination of the ratio of capitalization to operating costs, and (10) use by persons who do not have special training. The manual is divided into six main sections: Introduction, Reporting Income, Reporting Expenses, Attributing Total Operating Costs to the Functions Performed, Calculating the Units of Service Provided, and Cost Analysis. (CK)