Breiman, Friedman, Olshen, and Stone (1984) use a linear combination of prediction risk and tree size as a criterion in search of optimal trees. In this paper we use a linear combination of the above two components and the variable-observation cost as a criterion (C1) for the same purpose. This paper explicitly represents the relation among nested, pruned subtrees in terms of C1. Further, the theories in Breiman et al. (1984) concerning the search of optimal trees are generalized.