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 Reverues and Costs For the Month Ended May 31 Plarning Actual Budget hi hi Revenues Revenues and Costs and Costs Vari ances Exchanges completed 30 25 640$ 740 $100 U Revenlie Expenses 250 266 30 90 Legal and search fees Office expenses Equipment depreciation 275 233 25 75 25 U 33 F 5 F en Insur ance Total expense 654 $17$ 86 623 31 F $69 U Net operating income Note that the revenues and costs in the above report are unit revenues and costs. For example, the average office expense is $266 per exchange completed on the planning budget; whereas, the average actual office expense is $233 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 $5,200 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 owner/manager assess the performance of the company in May. Complete the performance report that would help the owner/manager assess the performance of the company 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.) Exchange Corp Flexible Budget Performance Report For the Month Ended May 31 Planning Budget Flexible Budget Actual Results Exchanges completed Revenue Expenses Legal and search fees Office expenses Equipment depreciation Rent Insurance Total expense Net operating income