Please explain both requirements for this problem. I posted an image of the start for requirement 1.

Examine the Kyler Company's simplified income statement based on variable costing. Assume that the budgeted volume for absorption costing in 20X0 and 20X1 was 1,380 units and that total fixed costs were identical in 20X0 and 20X1. There is no beginning or ending work in process (Click the icon to view the simplified income statement.) Requirements 1. Prepare an income statement based on absorption costing. Assume that actual fixed costs were equal to budgeted fixed costs. 2. Explain the difference in operating income between absorption costing and variable costing. Be specific.Data Table - X Income Statement Year Ended December 31, 20X1 Sales, 1,310 units at $14 $ 18,340 Deduct variable costs Beginning inventory, 110 units at $8 $ 880 Variable manufacturing cost of goods manufactured, 1,230 units at $8 9,840 Variable manufacturing cost of goods available for sale $ 10,720 Ending inventory, 30 units at $8 240 Variable manufacturing cost of goods sold $ 10,480 Variable selling and administrative expenses 450 Total variable costs 10,930 Contribution margin $ 7,410 Deduct fixed costs Fixed factory overhead at budget 4,692 Fixed selling and administrative expenses 350 Total fixed costs 5,042 Operating income 2,368 Print DoneRequirement 1. Prepare an income statement based on absorption costing. Assume that actual fixed costs were equal to budgeted fixed costs. Kyler Company Absorption Costing Income Statement For the Year Ended December 31, 20X1 Sales Operating income