This paper examines whether school lunch entrees made in a district from basic or raw U.S. Department of Agriculture Foods ingredients can be healthier and/or less expensive to prepare than those sent to external processers. Information on the nutritional content and cost to prepare entrees was gathered through interviews with school food service personnel and school food service records from a convenience sample of 10 school districts in California. The districts studied employed varying degrees of scratch-cooking and were diverse in terms of geographic location and the sociodemographic characteristics of the student body. All elementary school lunch entrees that included at least one USDA Foods ingredient offered during October 2010 were included in the sample (n=146 distinct entrees). Investigators found that there was no significant relationship between the total costs and level of scratch-cooking. Entrees with the highest level of scratch-cooking had significantly lower food costs and higher labor costs, with no significant difference in total costs compared with entrees with no scratch-cooking.