Microsoft Corporation provides software services using mixed costing. In July 2029, the company incurs the following costs related to its Azure cloud platform:

• Fixed Costs: $80 million
• Variable Costs: $40 million
• Semi-Variable Costs: $25 million

Required:

• Classify each cost as fixed, variable, or semi-variable.
• Allocate operating costs to each Azure service using the direct allocation method.
• Determine the cost per unit assuming 5 million units of service delivered.
• Analyze the cost structure of mixed costing in cloud computing services.
• Discuss strategies to manage operational costs in the software industry.