Adobe Inc. reported the following for the current year.

ADOBE INC.

Consolidated Income Statement

$12$ Months Ended $($$ millions$)$ Current Year Prior Year Two Years Prior

Revenue

Subscription $$20,485$ $$18,216$ $$14,533$

Product $665694634$

Services and other $858821919$

Total revenue $22,00819,73116,086$

Cost of revenue

Subscription $2,3041,9241,551$

Product $495750$

Services and other $678630809$

Total cost of revenue $3,0312,6112,410$

Gross profit $$18,977$ $$17,120$ $$13,676$

a$.$ Determine the overall gross profit margin for each year.

Numerator Denominator Result

Formula Gross Margin

Current year margin

Prior year margin

Two years prior margin

b$.$ Compute separate gross profit margins for each year for each type of revenue the company reports.

Numerator Denominator Margin

Current year

Subscription

Product

Services and other

Prior year

Subscription

Product

Services and other

Two years prior

Subscription

Product

Services and other

c$.$ Are the following statements true or false?

Statement True or False?

Product has the highest gross margin because research & development costs are included as a cost of revenue

The largest swings in gross margin over the past two years were reported in the Services and other segment.

Adobe's research and development costs are reported as operating expenses.

The revenue segment with the highest impact on overall gross margin is Subscription.