BlueSky Consulting, a management consulting firm, prepared a static budget for its operations for the current year. The budgeted and actual costs for the month of June are as follows:

• Budgeted revenue: $100,000
• Actual revenue: $110,000
• Budgeted expenses: $80,000
• Actual expenses: $85,000

a) Calculate the revenue variance and expense variance for BlueSky Consulting for the month of June.

b) Interpret the revenue variance and expense variance in terms of favorable or unfavorable performance.

c) Identify possible causes of the revenue variance and expense variance and suggest corrective actions for management to improve performance.