Answer (D) is correct . The budgeting process begins with the sales budget and then proceeds to the production budget. Once the production budget is complete, then the raw materials, direct labor, overhead, and cash budgets can be prepared. The capital budget is prepared outside the operating budget process, followed by a cash budget.
Answer (A) is incorrect because It cannot be prepared until the sales budget has been determined.
Answer (B) is incorrect because It cannot be prepared until the sales budget has been determined.
Answer (C) is incorrect because It cannot be prepared until the sales budget has been determined.
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