Final answer:
The preparation of a direct materials purchases budget involves multiple steps including preparing a sales budget, a production budget, deciding on the desired ending inventory of materials, and obtaining the expected price of each material type.
Step-by-step explanation:
Before a direct materials purchases budget can be prepared, the answer is e. do all of these. It is a systematic process that begins with a sales budget, which estimates the amount of sales expected in a given period. This would impact the production budget, which outlines how much needs to be produced to meet the sales demand and maintain desired inventory levels. Concurrently, you must decide on the desired ending inventory of materials, which influences how much raw material needs to be purchased. Lastly, obtaining the expected price of each type of material is crucial for preparing a costs accurate direct materials purchases budget. This comprehensive approach ensures that financial planning accounts for all aspects, from production to costs, ensuring the producer has the necessary funds to cover expenses.