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Incremental Budget Wood County uses an incremental approach to budgeting. The 2016 cash budget for...

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Accounting

Incremental Budget Wood County uses an incremental approach to budgeting. The 2016 cash budget for the Wood County Department of Motor Vehicles is presented as follows:

Supplies $22,500
Temporary and seasonal wages 34,500
Wages of full-time employees 277,500
Supervisor salaries 70,500
Rent 39,000
Insurance 21,000
Utilities 23,000
Miscellaneous 16,500
Contingencies and equipment 52,500
Total $557,000

Required Prepare an incremental cash budget for 2017, assuming the planned total budget increase is 2.5 percent. Budget details include a budget increment for salaries and wages of 4 percent, no change in rent, and 2 percent increases in the budget for supplies and miscellaneous. Utility companies have received approvals for rate increases amounting to 4 percent and insurance companies have announced an increase in premiums of 6 percent. (Hint: The Contingencies and equipment 2017 budget is a plug.)

QUESTION: What is Contingencies and equipment?

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