Purpose: To suggest an approach to program costing that includes the approaches and concepts developed in activity based costing. Design/methodology/approach: The paper utilizes a hypothetical case study of an Executive MBA program as a means of illustrating the suggested approach to costing. Findings: The paper illustrates both the benefits of using an activity based costing approach and the danger of allocating organizational sustaining costs to a specific program for the purpose of assessing the profitability of that program. Practical implications: University and faculty administrators will understand the benefits of activity based costing and they will understand that they should not evaluate the profitability of a program (nor make decisions about the termination of a program) on the basis of allocated organizational sustaining costs. Originality/value: The value of the paper is to university and faculty administrators, who will be able to utilize a new approach to costing university programs. (Contains 5 tables and 1 note.)