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Microsoft Corporation operates software development centers globally. In June 2030, the company incurs the following operating costs related to its software development: Development Center Rent:
Microsoft Corporation operates software development centers globally. In June 2030, the company incurs the following operating costs related to its software development:
- Development Center Rent: $30 million
- Software Development Labor: $50 million
- Research Materials: $15 million
- User Support Costs: $12 million
- Administration Overhead: $18 million
Labor costs are split between direct ($40 million) and indirect ($10 million).
Required:
- Calculate the total operating costs for Microsoft Corporation.
- Allocate administration overhead to the software development centers.
- Determine the cost per software license sold assuming 5 million licenses.
- Analyze the cost behavior of administration overhead in software development.
- Prepare an operating costing statement for Microsoft Corporation.
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