Walla-Walla-Water produces and bottles various types of waters which are each treated as a separate division. The three divisions are Spring Water, Fizzy Water, and Flavored Water. The Flavored Water line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information which was prepared for the most recent year:

Spring Fizzy Flavored Total Water Water Water Sales $900,000 $780,000 $600,000 $2,280,000 Variable costs 380,000 415,000 400,000 1,195,000 C t 'b ti on? u on 520,000 355,000 200,000 1,085,000 margin Fixed costs 200,000 180,000 225,000 605,000 Operating $320,000 $185,000 $(25,000) $480,000 income