Question: Oracle Corporation provides software services using operating costing. In April 2032, the company incurs the following operating costs: Development Center Rent: $35 million Software Development

Oracle Corporation provides software services using operating costing. In April 2032, the company incurs the following operating costs:

  • Development Center Rent: $35 million
  • Software Development Labor: $55 million
  • Research Materials: $20 million
  • User Support Costs: $15 million
  • Administration Overhead: $22 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 10 million licenses.
  • Discuss strategies to manage variable costs in operating costing.
  • Prepare an operating costing statement for Oracle Corporation.

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