Needing help answering yellow highlighted box under requirement 2.

Variable costing expenses $ .......... more costs during the year, so variable costing operating income is $ 198,000 less than absorption costing income the year.

Homework: Chapter 6 HW 9 LO 1,2,6 (Copy) Score: 2.27 of 3 pts 5 of 5 (5 complete) %E6-40A (similar to) The annual data that follows pertain to Sea Down There, a manufacturer of swimming goggles (the company had no beginning inventory (Chck the icon to view the data) Read the requirements Requirement 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Sea Down There for the year Begin with the conventional (absorption costing) income statement Sea Down There Income Statement (Absorption Costing) For the Year Ended December 31 Sales revenue $ 9.457.000 - X Data Table Less: Cost of goods sold 5,404,000 Gross profit 4053,000 Less Operating expenses 1.616,000 Sales price............ 5 49 5 2437 000 19 Variable manufacturing expense per unit... 5 Operating income Sales commission expense per unit ... 5 7 Now let's prepare the contribution margin (variable costing) income statement for Sea Down There for the year Fixed manufacturing overhead $ 1,935.000 Sea Down There Fixed operating expenses.... S 265.000 Contribution Margin (Variable Costing) Income Statement Number of goggles produced 215.000 For the Year Ended December 31 Number of goggles sold 193.000 Sales revenue $ 9.457.000 Less Vanable expenses Print Done Variable operating expenses $ 1.351 000 Variable cost of goods sold 3.667 000 Contribution margin 4 439.000 Less Foxed expenses Fixed manufacturing overhead 1935 000 265 000 Fixed operating expenses Choose from any list or enter any number in the input Delds and then click Check Answer Clear All de COSL 4,439,000 you Contribution margin Less: Fixed expenses Fixed manufacturing overhead Fixed operating expenses 1,935,000 265,000 Operating income 2,239,000 Requirement 2. Which statement shows the higher operating income? Why? Absorption costing operating income is higher than variable costing operating income. This is because absorption costing defers 5 198,000 of fixed manufacturing overhead as an asset in ending inventory. In contrast, variable costing expenses all of the fixed manufacturing overhead during the year. more costs during the year so variable costing operating income is 5 198,000 Variable costing expenses $ less than absorption costing income the year Choose from any list or enter any number in the input fields and then click Check