# Thread: Allocation rates calculations

1. ## Allocation rates calculations

A smart math person can help here with the need to change units of measure in inputs to an allocation rate calculation (to spread expenses among business units (BU's).
NOW: Calculate a moving 12-mo avg and divide it by sum of all BU's 12-mo avgs.
NEW: Divide input by BU by total input by month, then calculate 12-mo avg of these ratios (for a given month and for 12-mo avgs, they add to 1.0)

With current data (see attachment), the differences in the results are immaterial, but if there is a significant change in the typical values, the methods differ greatly in results. We need to go from a non-financial input to a financial one (from 1000's to millions), so that's why we thought to compute the ratios first, then average them, because it seemed it would not matter what the denominators were, but the averaging process throws in bigger errors than we can accept.

Some other ways to handle this change would be good, but we already considered restarting the averaging at the first period of the changeover (1st month would have 1 month of data, 2nd would average 2 mos., etc.).