Gates Corporation reported the following information concerning its direct materials.

Direct materials purchased (actual)	$	677,000
Standard cost of materials purchased	$	700,400
Standard price times actual amount of materials used	$	536,000
Actual production		26,400	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 24,000 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.