Information about Hannah Industries for the month ending December 31, 2019, is as follows:

Sales $450,000

Cost of goods sold $ 329,000

Net operating income $ 22,000

Beginning inventories:

Direct materials $ 70,000

Work in process $ 28,000

Finished goods $ 90,000

Ending direct materials is 10 percent smaller than beginning direct materials. Ending work in process is 75 percent of the beginning work in process. Ending finished goods increased by $15,000 during the year. Prime costs and conversion costs are 60 percent and 80 percent of total manufacturing costs added, respectively.

Assume no income taxes or indirect materials.

Required: Show the calculations.

a. Prepare a statement of cost of goods manufactured for December.

b. Prepare an absorption income statement for December.

c. Calculate prime costs.

d. Calculate conversion costs.