Application Problem

 A medium-sized bank has decided to automate its trust account service. The vice president of the trust department requested a benefit analysis of a trust package for possible installation. The say analyst first reviewed the cost of operating present trust activities. Vice president and three trust officers earned $64,000 in salaries Inventory and supplies average $.400 each year. Trust account statement asset reviews, and other trust reports are produced on an out system at an annual cost of $400. Overhead (air conditioning, light power, and maintenance) average $2,165 a year.

The analyst then evaluated three software packages design trust work. One package met the user's requirements. The purchase price was $13,980. When implemented, the computerized service reduce payroll by $10,OOO-the salary of a junior trust officer. Inventory and supplies were priced at $1,900. Overhead was calculated at for air conditioning, lighting, power, and maintenance.

When all the information was gathered, a report was drafted foe vice president with these facts and figures. He could see the co t computerized trust package. The operation costs of both systems summarized as follows:

Assignment

In the event the proposed system is implemented, a bro' house that deals with the trust department agreed to under percent of the system charge, or $3,495 per year. So the actual operations costs to the trust department are $69,045.