Answer:
Is an organizational structure where companies are organized into related activities, and the overhead costs associated with performing these activities are combined into cost pools.
Explanation:
An organizational structure can be defined as the process which typically involves dividing an organization into various functional units.
Basically, the organizational structure comprises of three (3) main dimensions and these are;
I. The vertical dimension: this is typically the decision-making responsibilities (decentralization and centralization).
II. The horizontal dimension: this divides the organization into subunits.
III. Integrating mechanisms: it is based typically on the strategic mechanism that controls the various subunits within an organization.
An activity center is an organizational structure where companies are organized into related activities, and the overhead costs associated with performing these activities are combined into cost pools.
Hence, this is a cost effective method as it would help to improve efficiency and reducing unnecessary costs.
