The accuracy of commercially prepackaged kits for microbial identification has become well established. Laboratory workers may encounter increasing demands for production of objective data to justify replacement of systems using individual biochemical tests in tubes. The authors present a system of cost analysis in which materials and labor costs are separately computed, and to which are added the effects of (1) fringe benefits, (2) decreased productivity resulting from administration, quality control, education and development, and (3) the additional expense of indirect costs that are allocated to laboratory procedures by accepted and standardized hospital accounting methods. Labor costs should be based on time-engineered studies conducted in individual laboratories. Alternatively, various published "unit values" may be used. The result may present several alternative differences in cost, depending on which unit values are accepted as applicable to the individual laboratory. Despite these uncertainties, the method of analysis provides a more objective means of justifying the cost of introduction of prepackaged kits where accuracy and speed of identification have already been proven to have advantages over biochemical tests in tubes.