is it possible to upgrade cpu in iMac from mid 2011?

Technically, Apple says no, it is not user upgradeable. You will find web sites of people who have done it, but it is far, far from a trivial task to disassemble an iMac to get to the socket, and then re-assemble the whole machine. If not highly technicaly savvy in tearing down integrated circuit electronics, the chance of you messing it up is pretty high. And I'm not at all sure that the logic board would support the i7 - it might, but you'd need to check that out.

Basically, for the average user, I would say, no you cannot.

P.S. what's involved in tearing down a 27" intel iMac - http://www.ifixit.com/Teardown/iMac-Intel-27-Inch-Teardown/1236/1

iMacs have all their electronics integrated onto the motherboard. The processors are not upgradeable. You could sell your iMac then use the proceeds towards the purchase on the other model. Note that there is not much of a performance difference between quad-core i5s and i7s.

For the vast majority of people the answer is no, but everymac has some info http://www.everymac.com/systems/apple/imac/stats/imac-core-i5-2.7-27-inch-alumin um-mid-2011-thunderbolt-specs.html. Click on Processor Upgrade for details, and click on this too http://www.everymac.com/systems/apple/imac/imac-aluminum-faq/imac-intel-aluminum -processor-upgrade-instructions.html. It says the processor is in a socket, implying not soldered.

The problems (like voiding warranty and risk of breaking lots of other stuff in the process) make the answer a "no" for all but the very adventuresome. IOW, you can't do it in an Apple-sanctioned way.