I'm kind of new at this myself.
I didn't even look at what the recommendation was for me, but looking now, I see it's a calorie reduction of 700 a day. That's about what I'm doing between eating fewer calories and exercising more.
Sleep doesn't add calories for me. With no sleep in my activity log, my calories burned during a day are 2188 (that's 24 hrs of sitting). When I add sleep in, it shows 352 for calories sleeping (7 hrs) and 1550 calories for sitting (17 hours), for a total of 1901 calories (shown in the blue area as "calories burned today"). I'm eating 1200-1500 calories a day.