Microsoft Corporation is analyzing its software development costs using different costing methods:

Requirements:

• Calculate the Standard Cost per software license:
  • Direct Costs: $30 per license
  • Indirect Costs: $10 per license

• Implement Marginal Cost Accounting to assess the cost impact of selling additional licenses.
• Evaluate the benefits of Activity-Based Costing in allocating software support costs.
• Discuss how each costing method influences pricing strategies and profitability in software sales.

Standard Cost Calculation:

Category	Amount per License ($)
Direct Costs	$30
Indirect Costs	$10
Total Standard Cost per License	$40