Millings Company has developed the following budgeted income statement: Sales Revenue (1600 units

Millings Company has developed the following budgeted income statement: Sales Revenue (1600 units x $20 sales price) Total Variable Expenses (1600 x $10 per unit) Contribution Margin Fixed Expenses Net Income $ 32,000 (16,000) 16,000 (8000) 8000 The Company is experimenting with new engineering techniques and believes it can reduce variable cost to $7.0 per unit and significantly improve the product. The innovations would double fixed costs but the company expects to be able to increase sales to 2800 units. If this strategy is pursued the company's budgeted net income will: decrease by $800. O O increase by $20,400 O increase by $12,400 decrease by -$400. O