Daps Co makes spades and forks. The following budgeted information is available:

                                                                                                      Month one                                  Month two

Fork production                                                                              220 units                                  240 units

Spade production                                                                           170 units                                 180 units

Each fork uses 1.5 kg of steel, and each spade uses 2 kg of steel.

No finished goods inventory is held, but Daps Co's raw material inventory policy is to hold enough material to cover half of the next month's production requirements.

A spreadsheet for the material purchases budget is being prepared for month one: 

                                 A                                                             B  

                                                                                                kgs

1              Steel required for production                                  Gap 1

2              Opening inventory                                                  Gap 2

3              Closing inventory                                                    Gap 3

4              Material purchases