In what different ways ‘cost’ is defined in distance education ? What is marginal and average costs, and fixed and variable costs in distance education? Managing costs in distance education needs an understanding of the types of costs incurred as well as the cost functions, i.e., what are the inputs and output variables and methods of computing these costs. In short, just like any other process, the focus on cost effectiveness and cost efficiency is a must, as lowering the cost and increasing the benefits improves the value of the process and its outcomes. Cost is a mathematical function, and in order to be precise, it needs to consider all the inputs that contribute to the cost of delivering distance education. Distance education is about scale, and hence, it should help understand how the output or the cost gets impacted by the inputs, such as the number of learners enrolled. In short, a measure like “economies of scale” is a good point of view to have. Education is a significant economic expenditure (around 3.5% of India’s GNP), and it is undoubtedly a significant proportion of national expenditure, perhaps second only to national defense. This makes analysis of educational costs for efficiency and effectiveness all the more necessary to understand where the money is coming from and how well it is being spent. For instance, are the right educational resources being allocated in the right sectors or regions for securing growth; or what factors are major ones in terms of influencing these costs; or what are the critical sources of funds that can be tapped, etc.? Consider the distance education function as an outcome of a process. Just like any other process, it has its own inputs and outputs. Educational institutes, just like any other firm, transform these inputs into outputs and, in this process, add value to the customer or consumer of their products and services (satisfying the need for new cognitive abilities of the buyer or customer). Outputs are the courses delivered and students transformed (gaining new knowledge and/or skills) as consumers of these courses (services, products). The production of these courses involves human resources like faculty members and non-human resources like ICT, Printing Machinery, Stationary Material, Office or Workplace Building/Infrastructure etc. Hence, the educational institutions have their own trade-offs in terms of acquiring these resources at a monetary value instead of making expenditure for other alternatives (for different products or goods i.e. alternative transformation opportunities). So, one of the ways to look at the cost of distance education is to look at it from the lens of various activities that are performed and do activity-based costing. It could be logically summed up around clusters of activities (activity centers). The cost of these activity centres, when added, could provide the total cost. Having activity centres helps understand how these activities contribute to the cost and how they could be made more efficient and effective. The other perspective is to look at the overall cost with its components split as direct or indirect, i.e., fixed and variable costs. Another useful perspective is to look at the cost as an average and marginal cost. Let’s first look at these activity centers. There are four of them: course design, course development, course delivery, and course evaluation. Course Design: This starts with a survey to establish the need for having a course in the first place. In addition, one can study the reports already published on the subject. It gives information about the demand and supply gap. For an educational institute, it is about understanding the needs of the nation by each state or region and the people or communities (and their demands or requirements) to be addressed. Eventually, the course needs to be defined in terms of various aspects of consideration like title, objectives, target groups, entry criteria, availability of experts to develop learning resources in different digital and non-digital formats, modality of the programme development and delivery, possible sources of funding for the development of such a programme and the fees to be charged from the learners or students, etc. Getting these aspects of consideration in place (i.e. performing activities associated with the course design activity-center), need time and efforts of the faculty members which means incurring expenses whether paid as a salary to them or honorarium to the experts and other expenses like procuring research reports or conducting market surveys etc. Course Development: This activity centre involved efforts and time spent on developing the components of the course like the programme handbook, student programme guide, course modules and units, credit hours for each, technology for digital content for distribution, student activities and practicum, student assessments and assignments, learning support system, etc. All these activities need time and cost allocation for developing the learning resources and environment. There are various course development models and also the mechanisms of media mix—supplementary, complementary, and integrated. Course Delivery: Once the course is developed (certificate, diploma, or degree), it needs to be delivered. It involves many activities like advertising the course and marketing it over the social media channels, enrolling the students into batches, managing payments (recurring or one-time or referral discount or credits), giving them access to the content digitally or shipping printed materials, organising online and offline sessions at study centers, faculty and industry expert lectures and demonstrations, communications and reminders for study and assessments (including announcements and notification in bulk over mobile applications and SMS etc.), web-based support and counselling or mentoring sessions, call centre or chat or email or discussion board support for learners, assessments and grading and publishing scores and certifications. Finally, managing them as alumni. All these activities are pertaining to the delivery of the course and are the activities to be considered for costing purposes. Course Evaluation: Once the programme is delivered or being delivered, there are quality monitoring activities to understand where the gaps are in terms of meeting the expectations of the stakeholders and the learning outcomes or objectives. These gaps or issues or suggestions,