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 been 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 Budget Actual Unit Revenues Unit Revenues and Costs and Costs. Variances Exchanges completed 30 25 Revenue $ 610 $ 690 $ 80 U Expenses: Legal and search fees 245 225 20 U Office expenses 221 251 30 F Equipment depreciation Rent Insurance 25 30 5 F 75 90 15 F 15 18 3 F Total expense 581 614 33 F Net operating income $ 29 $ 76 $ 47 U Note that the revenues and costs in the above report are unit revenues and costs. For example, the average office expense is $251 per exchange completed on the planning budget; whereas, the average actual office expense is $221 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 $4,950. All of the company's revenues come from fees collected when an exchange is completed. Required: 1. Is the report prepared by the bookkeeper useful as a performance report? 2. Prepare the performance report that would help the owner/manager assess the performance of the company in May.