Exchange Corp. is a company that acts as a facilitator in tax-favored real estate swaps. Such swaps, know as 1031 exchanges, permit participants to avoid some or all of the capital gains taxes that would otherwise be due. The bookkeeper for the company has beern asked to prepare a report for the company to help its owner/manager analyze performance. The first such report appears below: Exchange Corp Analysis of Revenues and Costs For the Month Ended May 31 Planning 1.11 points Actual Budget Unit and 30 Unit Revenues Revenues and 25 620720 $100 U 03:30:32 Costs Costs Variances Exchanges completed Revenue Expenses: References Legal and search fees Office expenses Equipment depreciation Rent Insurance 263 227 25 75 15 605 240 260 30 90 18 638 23 U 33 F 5 F 15 F 3 P 33 F $ 67 U Total expense Net operating income $ 15 82 Note that the revenues and costs in the above report are unit revenues and costs. For example, the average office expense is $260 per exchange completed on the planning budget, whereas, the average actual office expense is $227 per exchange completed. Legal and search fees is a variable cost; office expenses is a mixed cost; and equipment depreciation, rent, and insurance are fixed costs. In the planning budget, the fixed component of office expenses was $5,100 All of the company's revenues come from fees collected when an exchange is completed. Required