The usual starting point for a master budget is b) the sales forecast or sales budget.
The sales forecast is critical because it predicts the revenue a company expects to generate over a specific period. This forecast drives other components of the budget, including production levels, inventory requirements, and direct materials purchases. By starting with the sales budget, organizations can align their financial resources and operational plans to meet projected sales, ensuring that they are adequately prepared to meet customer demand.
In contrast, while the budgeted income statement, production budget, and direct materials purchase budget are all important components of the master budget, they typically follow from the sales budget rather than serving as the initial starting point.