Practice Test Geeks(SSO) Ship Security Officer Practice Test
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Cost & Pricing Analysis Flashcards

7 cards from real SSO practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Cost & Pricing Analysis flashcards as text

  1. A Ship Security Officer is evaluating a proposal to outsource vessel patrols. The in-house cost is $95,000/year; the outsourced quote is $78,000/year plus a $10,000 transition fee. What is the net first-year savings from outsourcing?

    Answer: $7,000

    First-year savings = $95,000 − ($78,000 + $10,000) = $95,000 − $88,000 = $7,000.

  2. Which pricing strategy involves setting a price based on the total cost of providing a service plus a predetermined profit margin?

    Answer: Cost-plus pricing

    Cost-plus pricing calculates total costs and adds a fixed markup percentage to determine the final service price.

  3. When an SSO requests emergency procurement of security equipment following a security incident, which cost element typically increases most significantly?

    Answer: Expedited shipping and handling charges

    Emergency procurement almost always triggers premium freight and expediting charges that can exceed the equipment cost itself when speed is paramount.

  4. A vessel must comply with a new USCG security directive requiring upgraded communication equipment. This is best classified as which type of cost driver?

    Answer: Regulatory compliance cost

    Costs mandated by a government regulatory body such as the USCG are classified as regulatory compliance costs, which are non-discretionary.

  5. An SSO is reviewing bids for security guard services. Bid A = $22/hr for 3,000 hours; Bid B = $25/hr for 3,000 hours with included supervisory coverage. What is the annual cost difference?

    Answer: $9,000

    ($25 − $22) × 3,000 hours = $3/hr × 3,000 = $9,000 annual difference in favor of Bid A.

  6. Which financial document provides the SSO with a month-by-month comparison of actual versus planned security expenditures?

    Answer: Budget variance report

    A budget variance report tracks actual spending against the approved budget on a periodic basis, enabling timely corrective action.

  7. When a security contract is awarded to a vendor without competitive bidding due to sole-source justification, what must the SSO typically document?

    Answer: A written justification explaining why only one source can fulfill the requirement

    Sole-source procurement requires a written justification documenting the unique capability or urgent circumstance that prevents competitive bidding.