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:

(Company Name) Corp Analysis of Revenues and Costs For the Month Ended May 31
Actual Unit Revenues and Costs	Planning Budget Unit Revenues and Costs	Variances

Exchanges completed				25					20
Revenue	590		630			$		40			U
Expenses:
Legal and search fees		209			195		14			U
Office expenses		196			233		37			F
Equipment depreciation		24			30		6			F
Rent		60			75		15			F
Insurance		12			15		3			F
Total expense		501			548		47			F
Net operating income	89		82			$		7			F

Note that the revenues and costs in the above report are unit revenues and costs. For example, the average office expense is $233 per exchange completed on the planning budget; whereas, the average actual office expense is $196 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 $4,500.

All of the companys revenues come from fees collected when an exchange is completed.

Required:
1.	Prepare a Flexible Budget Performance Report which includes the revenue, spending and activity variances. Please show how you got the answer you arrived at. Thank you!