Exercise 17-20 (Static) Prorating Direct Material Cost Variances (LO 17-1) Gates Corporation reported the following information concerning its direct materials. Direct materials purchased (actual) $ 673,000 Standard cost of materials purchased $ 688,000 Standard price times actual amount of materials used $ 444,000 Actual production 22,000 units Standard direct materials costs per unit produced $ 20 Assume that Gates Company had no beginning finished goods inventory and only produced one product. Gates sold 20,000 units during the period. Required: a. Assume Gates writes off all variances to Cost of Goods Sold. Prepare the entries Gates would make to record and close out the variances. b. Assume Gates prorates all variances to the appropriate accounts. Prepare the entries Gates would make to record and close out the variances.

Complete this question by entering your answers in the tabs below. Required A Required B Assume Gates writes off all variances to Cost of Goods Sold. Prepare the entries Gates would make to record and close out the variances. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the standard cost of materials used and the materials efficiency variance. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal Required A Required B