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ACL Group Ltd. has three major product lines, soda, juice, and flavored water. ACL is considering discontinuing producing flavored water because the divisional income statement

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ACL Group Ltd. has three major product lines, soda, juice, and flavored water. ACL is considering discontinuing producing flavored water because the divisional income statement indicates it is being sold at a loss. The most recent annual income statement is outlined below: Juice (000s) (000s) (000s) $48,330 $44,980 $26,230 16,500 19,600 12,700 24.4 Soda Flavored Water Sales Variable Costs Fixed Costs Operating Income - 21,800 00 18.300 $10.030 The fixed costs include fixed costs directly attibutable to each product line as well as allocated common costs. The portion of directly attributable fixed costs included in fixed costs is 40% for soda, 75% for juice and 55% for flavored water. Required: Should ACL Group Ltd. discontinue the product line of flavored water? Explain why or why not. Show all supporting calculations

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