The process of determining laboratory sectional and departmental costs and test costs for instrument-generated and manually generated reportable results for toxicology laboratories has been outlined in this article. It is hoped that the basic principles outlined in the preceding text will clarify and elucidate one of the most important areas needed for laboratory fiscal integrity and its survival in these difficult times for health care providers. The following general principles derived from this article are helpful aids for managers of toxicology laboratories. 1. To manage a cost-effective, efficient toxicology laboratory, several factors must be considered: the laboratory's instrument configuration, test turnaround time needs, the test menu offered, the analytic methods used, the cost of labor based on time expended and the experience and educational level of the staff, and logistics that determine specimen delivery time and costs. 2. There is a wide variation in costs for toxicologic methods, which requires that an analysis of capital (equipment) purchase and operational (test performance) costs be performed to avoid waste, purchase wisely, and determine which tests consume the majority of the laboratory's resources. 3. Toxicologic analysis is composed of many complex steps. Each step must be individually cost-accounted. Screening test results must be confirmed, and the cost for both steps must be included in the cost per reportable result. 4. Total costs will vary in the same laboratory and between laboratories based on differences in salaries paid to technical staff, differences in reagent/supply costs, the number of technical staff needed to operate the analyzer or perform the method, and the inefficient use of highly paid staff to operate the analyzer or perform the method. 5. Since direct test costs vary directly with the type and number of analyzers or methods and are dependent on the operational mode designed by the manufacturer, laboratory managers should construct an actual test-cost data base for instrument or method in use to accurately compare costs using the "bottom-up" approach. 6. Laboratory expenses can be examined from three perspectives: total laboratory, laboratory section, and subsection workstation. The objective is to track all laboratory expenses through each of these levels. 7. In the final analysis, a portion of total laboratory expenses must be allocated to each unit of laboratory output--the billable procedure or, in laboratories where tests are not billed, the tests produced.(ABSTRACT TRUNCATED AT 400 WORDS)