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In the first subtype, the analyst ( following the practice of railroad analysis in this particular respect ) distributes both total operating costs and total annual capital costs ( including an allowance for `` cost of capital '' or `` fair rate of return '' ) among the different classes and units of service.

Here, an apportionment, say, of $5,000,000 of the total costs to residential service as a class would include an allowance of perhaps 6 per cent as the cost of whatever capital is deemed to have been devoted to the service of the residential consumers.