This study investigated ways in which the costs of a library's direct and indirect services can be equitably allocated to its heterogeneous group of institution users. It was conducted from October 1, 1974 to March 31, 1977. The final report is divided into four parts, each describing a separate issue. Part I discusses the general administrative concerns prompting the study, gives background information on the Houston Academy of Medicine-Texas Medical Center Library (HAM-TMC) where the study was conducted and data collected, lists the institutions which make up the library's user population, and identifies the personnel of those institutions whose needs define the kinds of collections and services required of the library. The library's direct and indirect services to its user groups are described, and matrices show the types of resources and labor required for each. A cost assessment model of the total operating costs for the HAM-TMC library was generated: total costs = out-of-pocket costs for direct services + support costs variable with usage + support costs fixed with usage but related to institutional programs and other factors. The model allows the library's administration to discuss and refine institutional assessments rapidly and accurately as priorities change or unforeseen circumstances arise. Parts II and III of the report focus on the cost assessment model and its applications. (Author/JPF)