In reviewing activity for July, the controller of Mathis, Inc., collected the following data concerning direct materials.

Actual production 107,000 units

Direct materials purchased (actual) $1,738,800

Standard cost of materials purchased 1,562,000

Standard direct materials costs per unit produced 14

Standard price times actual amount of materials used 1,413,950

Assume that Mathis Company had no beginning finished goods inventory and only produced one product. Mathis sold 94,160 units during the period.

a.Assume Mathis writes off all variances to Cost of Goods Sold. Prepare the entries Mathis would make to record and close out the variances

1.Record the standard cost of materials used and the materials efficiency variance.

2.Record the cost of the direct materials purchased and the materials price variance.

3.Record the closure of direct labor cost variances to Cost of Goods Sold.

b.Assume Mathis prorates all variances to the appropriate accounts. Prepare the entries Mathis would make to record and close out the variances.

1.Record the standard cost of materials used and the materials efficiency variance.

2.Record the cost of the direct materials purchased and the materials price variance.

3.Record the closure of direct labor cost variances to Cost of Goods Sold and Finished Goods Inventory.