21. Chock-a-Nut makes chocolate covered pecan clusters. The company has produced the following budgeted income statement for 2007: Sales (2,500 units @ $16 per box) Amount Total Variable Costs (2,500 @ $9 per box) $ 40,000 (22,500) (8,000) Fixed Costs Net income 9,500 Chock-a-Nut is considering a new engineering technology, which it believes can reduce variable costs to $7 per box and significantly improve the quality of its product. The innovation will increase total fixed costs by $9,000 per year. In addition, the company expects to be able to increase sales to 3,200 units because of improved quality. [Sales price will remain the same @$16 per box.] Assuming Chock-a-Nut decides to pursue this strategy, by what amount would the net income change in 2007? A. Decrease by $ 4,100 B. Increase by $ 2,300 C. Increase by $ 3,500 D. Increase by $ 3,900 E. None of the above answers can be determined as correct