Yummy Jams makes a fruit jam with oranges and raspberries. The production manager has determined that to produce 40 kg of jam requires 30 kg of oranges and 20 kg of raspberries. During the first quarter of the year 5,600 kilograms of oranges and 4,400 kilograms of raspberries were used to make 8,200 kilograms of jam. Actual and budgeted prices per kilogram are as follows:

Actual Budgeted

Oranges $3.20 $3.00

Raspberries $5.75 $6.00

Required

1. What is Yummy Jams total mix variance for the quarter? (4 marks)
2. What is Yummy Jams total yield variance for the quarter? (4 marks)

(continued on the next page)

QUESTION 7 (continued)

3. Qualitative analysis: As the cost accountant for Yummy Jams, you must assess the first quarter results and make changes where necessary. Fully answer the following questions. Remember to use pertinent data to back your answer:

1. Explain why the production manager likely changed the mix of the oranges and raspberries. (2 marks)
2. Based on the variances calculated did the production manager make the right decision when changing the mix? Why or why not? (3 marks)

Explain one other consequence of changing the mix that is not related to cost. (1 mark)