the first budget to be developed, because it is derived from other budgets that must be developed first.

B. Determination of manufacturing capacity is a part of the process of developing the sales budget as well as the production budget. However, determination of manufacturing capacity is not necessarily the first thing to be done in developing a comprehensive budget for a manufacturing company.

C. The sales plan/forecast is usually prepared first in the budgeting process. The production budget and all the other budgets for the company are derived from the sales budget.

D. The capital budget is usually prepared for periods of several years. Any planned projects affecting the next year's budget need to be included in the budget. The capital budget is not developed along with the next year's budget, though, because it is outside of the current year's budget. So it would not be the first budget to be developed.