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$22,500Temporary and seasonal wages34,500Wages of full-time employees277,500Supervisor salaries70,500Rent39,000Insurance21,000Utilities23,000Miscellaneous16,500Contingencies and equipment52,500Total$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.)

Wood County Department of Motor VehiclesIncremental BudgetFor the Year 2017SuppliesTemporary and seasonal wagesWages of full-time employeesSupervisor salariesRentInsuranceUtilitiesMiscellaneousContingencies and equipmentTotal