The Danish Ministry of Culture is currently funding a project to set up a model for costing preservation of digital materials held by national cultural heritage institutions. The overall objective of the project is to provide a basis for comparing and estimating future financial requirements for digital preservation and to increase cost effectiveness of digital preservation activities. In this study we describe an activity based costing methodology for digital preservation based on the OAIS Reference Model. In order to estimate the cost of digital migrations we have identified cost critical activities by analysing the OAIS Model, and supplemented this analysis with findings from other models, literature and own experience. To verify the model it has been tested on two sets of data from a normalisation project and a migration project at the Danish National Archives. The study found that the OAIS model provides a sound overall framework for cost breakdown, but that some functions, especially when it comes to performing and evaluating the actual migration, need additional detailing in order to cost activities accurately.