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 CorpAnalysis of Revenues and CostsFor the Month Ended May 31 Actual Planning Budget Variances unit Revenues Unit Revenues and cost and cost Exchanges completed 30 25Revenue $ 620 $ 700 $ 80 UExpenses:Legal and search fees 251 230 21 U Office expenses 140 254 114 FEquipment depreciation 25 30 5 FRent 75 90 15 FInsurance 15 18 3 FTotal expense 506 622 116 FNet operating income $114 $78 $ 36 FNote that the revenues and costs in the above report are unit revenues and costs. For example, the average office expense is $254 per exchange completed on the planning budget; whereas, the average actual office expense is $140 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 $5,000. 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?a. Yesb. No2. Complete a 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.)