Activity based costing can be used to trace revenue deductions such as discounts to individual orders and customers.

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Activity based costing is a costing methodology that traces indirect costs to specific activities and then assigns those costs to individual products or services based on the amount of time or resources consumed by each activity. This methodology can also be used to trace revenue deductions such as discounts to individual orders and customers, allowing companies to more accurately understand the profitability of specific products, services, customers or orders.

Activity Based Costing Can Be Used to Trace Revenue Deductions