The purpose of this article is to explore quality and growth implications emergent from various incremental costing models applied to distance education units. Prior research relative to costing models and three competing costing models useful in the current distance education environment are discussed. Specifically, the simple costing model, unit costing model, and marginal costing model are critically analyzed relative to their quality and growth implications. Finally, the paper will provide rationale suggesting that the marginal costing model represents the most accurate estimation for profitability of distance learning units. (Contains 1 table and 4 figures.)