Required information [The following information applies to the questions displayed below.) Diego Company manufactures one product that is sold for $78 per unit. The following information pertains to the company's first year of operations in which it produced 60,000 units and sold 55,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses is eses es wNNO $1,260,000 $ 654,000 11. If the company produces 5,000 fewer units than it sells in its second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in Year 2? O Higher O Lower