i have gone through a number of articles which have used this approach but they are not clear in how costs were assigned to different cost centres.
The assignments vary with the application. In the earliest models (for example Blue Cost Blue Shield model) the indirect costs were allocated by proportion of utilization of the service. Here the objective was to allocate cost to the insurers based on the proportion of a company's enrollees in the population served. For example, nursing services might be allocated by the number of inpatient days consumed by a payee. In IT the allocation might be on the number of records accessed or on total billings or patient days depending on the intended use of the cost data.
the article uploaded by nirmala is the summary and efficient method.
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