This paper uses case studies and two web-based digital reference cost calculators to illustrate the choices and challenges involved in measuring the cost of offering a digital reference service. The models are interactive and reusable for any number of cost formulations. Case studies provide practical scenarios designed to show the strengths and limitations of the cost models. Exercises are included to clarify concepts and challenge students to think critically about service issues. This paper ends with an appendix of selected references to important research on measuring reference service benefits and effectiveness.