tangible and intangible costs/benefits Ex: estimated cost of customer orders

received but lost or misplaced(tangible)= 30,000 Php Estimated cost of potential customer orders which were not secured due to poor customer image of the company(intangible)= 24,000 Php

 direct

and indirect cost/benefits Direct costs- directly related to the expense of operating the system Indirect costs- come from the operation of other subsystems that support the main system
recurring

and nonrecurring costs/benefits

PERSONNEL COSTSEQUIPMENT COSTS SUPPLIES AND EXPENSE COSTS

OVERHEAD COSTS

used to determine the economic advantages of the new versus the current system , or to determine the economic advantages of one new systems

alternative to another.
-

present the current systems costs vs. the

new systems costs

TO COMPARE THE COSTS OF A NEW SYSTEM TO THE CURRENT SYSTEM , AND TO DETERMINE THE POINT AT WHICH THE NEW

SYSTEM WILL COST THE SAME AS THE OLD.

Investment period- new system has a higher cost

Period of return-new system has a lower cost

while break-even analysis indicates when the costs for current and new system will be equal, it does not tell when the initial new systems investment will be fully recovered as a result of its greater economy. We have to compare the cost difference to the left of the break-even point to the cost difference to the right of the break-even point.

 to

effectively determine data processing costs the system analyst must obtain info for each of the cost categories: - equipment costs --- hardware & software -personnel costs --- operators salaries and benefits -supplies and expense costs--- data processing supplies -overhead costs