Steven "Herb" Chambers of Boston Company created budgeted financials statements. The expected income statement is below:

Sales Revenue (1,700 units $20 sales price)	$	34,000
Total Variable Expenses (1,700 $9 per unit)		(15,300	)
Contribution Margin		18,700
Fixed Expenses		(9,350	)
Net Income	$	9,350

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 2,900 units. If this strategy is pursued the company's budgeted net income will:

Multiple Choice

a. decrease by $4,750.

b. increase by $19,000.

c. decrease by $3,550.

d. increase by $9,650.