The Organic Bread Company (OBC) makes a range of breads for sale direct to the public. The production process begins with workers weighing out ingredients on electronic scales and then placing them in a machine for mixing. A worker then manually removes the mix from the machine and shapes it into loaves by hand, after which the bread is then placed into the oven for baking.

All baked loaves are then inspected by OBCs quality inspector before they are packaged up and made ready for sale.

Any loaves which fail the inspection are donated to a local food bank.

The standard cost card for OBCs Mixed Bloomer, one of its most popular loaves, is as follows:

White flour 450 grams at 180 per kg 081

Wholegrain flour 150 grams at 220 per kg 033

Yeast 10 grams at 20 per kg 020

Total 610 grams 134

Budgeted production of Mixed Bloomers was 1,000 units for the quarter, although actual production was only 950 units. The total actual quantities used, and their actual costs were:

Kg per kg

White flour 4085 190

Wholegrain flour 1520 210

Yeast 100 2000

Total 5705

Required:

(a) Calculate the total material mix variance and the total material yield variance for OBC for the last quarter.

(b) Using the information in the question, suggest THREE possible reasons why an ADVERSE MATERIAL YIELD variance could arise at OBC.