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 ownerimanager analyze performance. The first such report appears below Exchange Corp Analysis of Revenues and Costs For the Month Ended May 31 Actual Planning Unit Revenues and Costs and Costs Variances 40 Unit Revenues 50 Revenue 385 $395 $10 U Legal and search fees Office expenses 165 135 10 45 19 U 23 F 2 F 9 F 184 Rent 36 Total expense 344 360 16 F Net operating income 41 35 $6 F Note that the revenues and costs in the above report are unit revenues and costs. For example, the average office expense is $135 per exchange completed on the planning budget; whereas, the average actual office expense is $112 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 oosts. In the planning budget, the foxed 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? No 2. Complete a performance report that would help the ownerimanager 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.) Flexible Budget Parformance Report For the Month Ended May 31 Revenue and Spending Flexible Actual Results 19.250 Expenses Legal and search fees Total e