Hello, @Charles Storkaas
I wrote about this in my ETBMA post about a year ago and presented it in London, at the European User Group in March 2020. I'll see if I can re-post it.
We had a very similar issue, but at the Application level.
Our solution looks like this:

We have four levels, and this allows us to have the required flexibility to depict IaaS/PaaS architectures and have the Application object receiving all those intermediate costs. We do not have or allow fallout or over-allocation.
In your case, you could replace our "Tools" with "Applications" and the "Applications" in the diagram with "Business Services" and it might be what you're looking for.
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Regards, Guillermo
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Original Message:
Sent: 03-12-2021 08:56
From: Charles Storkaas
Subject: Services
Hi all,
I just want to check if some of you have experience of services that consists of other services.
My organization wants to allocate costs directly from IT Towers and from other services to a service. For example service Worksplace – Client Computing would consist of costs both from IT Towers (from tower End User - Worksplace) but also from other services such as Delivery Services (Support, Security & Compliance and Operations) and Infrastructure Services (Storage, Data Center and Compute).
What my colleague and myself have learned this is going to make our TBM model very complex and lead to overallocating costs in the model. Have any of you had the same discussion within your organizations? What are your experiences? Good and bad, pros and cons.
What are your recommendations for us?
Have a great weekend!
#CostingStandard(CT-Foundation)