We present a formalism of distorted wave impulse approximation (DWIA) for analyzing spin observables in nucleon inelastic and charge exchange reactions leading to the continuum. It utilizes response functions calculated by the continuum random phase approximation (RPA), which include the effective mass, the spreading widths and the ∆ degrees of freedom. The Fermi motion is treated by the optimal factorization, and the non-locality of the nucleon-nucleon t-matrix by an averaged reaction plane approximation. By using the formalism we calculated the spin-longitudinal and the spin-transverse cross sections, IDq and IDp, of 12 C, 40 Ca ( p, n) at 494 and 346 MeV. The calculation reasonably reproduced the observed IDq, which is consistent with the predicted enhancement of the spin-longitudinal response function RL. However, the observed IDp is much larger than the calculated one, which was consistent with neither the predicted quenching nor the spin-transverse response function RT obtained by the (e, e ′ ) scattering. The Landau-Migdal parameter g ′ N∆ for the N ∆ transition interaction and the effective mass at the nuclear center m * (r = 0) are treated as adjustable parameters. The present analysis indicates that the smaller g ′ N∆ (≈ 0.3) and m * (0) ≈ 0.7m are preferable. We also investigate the validity of the plane wave impulse approximation (PWIA) with the effective nucleon number approximation for the absorption, by means of which RL and RT have conventionally been extracted.