The correct answer is: Raw materials inventories are budgeted to increase.

Purchases would need to exceed production requirements in order to build up inventory.

An increase in finished goods inventory may lead to an increase in production and in the quantity of material required for production. This would not mean that the quantity of materials purchased should be higher than the production requirements, however.

A higher sales volume would mean that finished goods inventory would be reduced. This would not mean that the quantity of materials purchased should be higher than the production requirements, however.