Knitline Inc. produces high$-$end sweaters and jackets in a single factory. The following information was provided for the coming year.

Sweaters

Jackets

Sales $ $210,500$ $ $449,200$

Variable cost of goods sold $144,200195,600$

Direct fixed overhead $24,60049,200$

A sales commission of $6\%$ of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $$20,400$ for the sweater line and $$49,800$ for the jacket line.

Common fixed overhead for the factory was estimated to be $$47,900.$ Common selling and administrative expense was estimated to be $$16,800.$

Required:

$1.$ Prepare a segmented income statement for Knitline for the coming year, using variable costing.

$2.$ Suppose that next year, all revenues and costs are expected to remain the same except for direct fixed overhead expense, which will go up by $$9,170$ for one of the product lines due to costs related to new equipment. Does it matter which line $($sweaters or jackets$)$ requires the new equipment? Why?