The correct answer is option 'B', the sales budget.

A production budget is an important component of the overall budgeting process in a business organization. It refers to the estimated or planned production for a given period, usually a year, and outlines the resources needed to achieve the desired production levels.

The production budget is dependent on various factors, including the sales budget. Let's understand why the sales budget influences the production budget:

Sales Budget:
- The sales budget is a forecast of the expected sales revenues for a specific period. It is prepared based on market demand, customer preferences, and other market factors.
- The sales budget provides information on the number of units or products that the company expects to sell during the budget period.
- It also includes details such as the selling price per unit, sales volume, and total sales revenue.

Impact on Production Budget:
1. Estimating Production Levels: The production budget is prepared based on the sales budget. It helps the production manager determine the number of units or products that need to be manufactured to meet the anticipated sales demand.
2. Production Capacity Planning: The sales budget helps the production manager assess the company's production capacity and allocate resources accordingly. It ensures that the company can meet the sales targets without overburdening its production facilities.
3. Material and Labor Requirements: The sales budget helps determine the quantity of raw materials and labor hours needed to produce the required units. This information is crucial for procurement and resource planning.
4. Cost Estimation: The production budget is closely linked to the cost budget. The sales budget provides insights into the expected sales volume, which helps in estimating the production costs, such as direct materials, direct labor, and manufacturing overheads.
5. Inventory Management: The sales budget helps in determining the desired level of inventory. It ensures that the company maintains adequate stock to meet customer demand while avoiding excess inventory carrying costs.

In conclusion, the production budget is dependent on the sales budget as it provides essential information for estimating production levels, planning production capacity, determining resource requirements, estimating production costs, and managing inventory effectively. Therefore, the sales budget plays a crucial role in the overall budgeting process and influences the production budget.