Exchange Corp. is a company that acts as a facilitator in taxfavored 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 ownerfmanager 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 Unit Revenues Revenues and and Costs Costs Variances Exchanges completed 25 29 Revenue $ 579 $ 619 $46 U Expenses: Legal and search fees 19? 185 12 U Office expenses 184 22? 43 F Equipment depreciation 24 3B 6 F Rent 63 3'5 15 F Insurance 12 15 3 F Total expense 4?? 532 55 F Net operating income $ 93 $ 73 $15 F Note that the revenues and costs in the above report are unit revenues and costs. For example, the average ofce expense is $227 per exchange completed on the planning budget; whereas, the average actual ofce expense is $184 per exchange completed. Legal and search fees is a variable cost: ofce expenses is a mixed cost; and equipment depreciation, rent, and insurance are xed costs. In the planning budget, the fixed component of office expenses was $4,400. 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. Complete the performance report that would help the ownerfmanager assess the performance of the company in May. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Is the report prepared by the bookkeeper useful as a performance report? OYes ONO Required 2 ) Complete this quation by entering your answers in the tabs below. Required 1 Required 2 Complete the performance report that would help the ownerfmanager assess the performance of the companyr in May. {Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Exchanges completed Revenue Expenses: Legal and search fees Office expenses Equipment depreciation Insurance Total expense Net operating income