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.

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.)

No	Event	General Journal	Debit	Credit
A	1	Direct materials efficiency variance	4,000selected answer correct	not attempted
		Work-in-process inventory	1,000selected answer incorrect	not attempted
		Direct materials inventory	not attempted	15,000selected answer incorrect
B	2	Direct materials inventory	not attempted	1,000selected answer incorrect
		Accounts payable	12,000selected answer incorrect	not attempted
		Direct materials price variance	not attempted	15,000selected answer correct
C	3	Direct materials price variance	not attempted	not attempted
		Direct materials efficiency variance	not attempted	not attempted
		Cost of goods sold	not attempted	not attempted

Required

B. Assume Gates prorates all variances to the appropriate accounts. Prepare the entries Gates would make to record and close out the variances. (into three journals like in part a)

a	Record the standard cost of materials used and the materials efficiency variance.
b.	Record the cost of the direct materials purchased and the materials price variance.
c	Record the closure of direct labor cost variances to Cost of Goods Sold and Finished Goods Inventory.

Event	General Journal	Debit	Credit
a
b
c