Microsoft Corporation operates software services using operating costing. In June 2031, the company incurs the following operating costs:

• Development Center Rent: $30 million
• Software Development Labor: $50 million
• Research Materials: $15 million
• User Support Costs: $12 million
• Administration Overhead: $18 million

Required:

• Classify each cost as fixed, variable, or semi-variable.
• Analyze the cost behavior of operating costs in software development.
• Determine the cost per software license sold assuming 5 million licenses.
• Discuss strategies to manage variable costs in operating costing.
• Prepare an operating costing statement for Microsoft Corporation.