Segmented Income Statement Knitine Inc. produces high-end sweaters and Jackets in a single factory. The following information was provided for the coming year. Sales Variable cost of goods sold Direct foed overhead Sweaters $210,000 145,000 25,000 Jackets $450,000 196,000 47,000 A sales commission of 5% of sales is paid for each of the two product lines. Direct forced selling and administrative expense was estimated to be $20,000 for the sweater line and $50,000 for the jacket line Common fixed overhead for the factory was estimated to be $45,000. Common selling and administrative expense was estimated to be $15,000. Required: Prepare a segmented income statement for Knitline for the coming year, using variable costing. Enter all amounts as positive numbers. Required: Prepare a segmented income statement for Knitline for the coming year, using variable costing. Enter all amounts as positive numbers. Knitline Inc. Segmented Income Statement For the Coming Year Sweaters Jackets Total Sales Less variable expenses: Variable cost of goods sold Variable selling expense Contribution margin Less direct fixed expenses: Direct fixed overhead Direct selling and administrative Segment margin Less common fixed expenses: Common fixed overhead Common selling and administrative Operating income for directed overhead expense, which will go up by $10,000 for one of the productes due to costs related to new equipment. 2. CONCEPTUAL CONNECTION Suppose that next year, al revenues and costs are expected to remain the same Does it matter which linew ers or jackets) requires the new equipment Why? If the new e m ent is needed in the water product line, the increase will cause that woment margin to become a loss and management will need to consider whether the ine should be dropped