Final answer:
The correct logical order to prepare the budgets is (4) sales budget, (1) production budget, (2) direct material usage budget, (3) direct materials purchase budget, represented by option b. 4-1-2-3.
Step-by-step explanation:
The logical order for preparing budgets within a manufacturing company typically starts with the sales budget, which forecasts the number of units expected to be sold. This provides the basis for the production budget, which establishes how many units need to be produced to meet sales demands and maintain adequate inventory levels. After defining production requirements, a company can create the direct material usage budget, which details the quantity of materials needed for production. Finally, the company prepares the direct materials purchase budget, which specifies the amount of material to be purchased, taking into account both the direct material usage and existing inventory.
Therefore, the correct order to prepare these budgets is sales budget, production budget, direct material usage budget, followed by the direct materials purchase budget.
The logical choice that represents this sequence is option b. 4-1-2-3: (4) sales budget, (1) production budget, (2) direct material usage budget, (3) direct materials purchase budget.