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
A Ship Security Officer must allocate a $50,000 annual security budget across four categories. If personnel costs consume 60%, what dollar amount remains for equipment, training, and administration?
Answer: $20,000
$50,000 × (1 − 0.60) = $50,000 × 0.40 = $20,000 remains for non-personnel categories.
Which cost analysis technique helps an SSO determine the minimum level of security service utilization needed to justify a fixed investment?
Answer: Break-even analysis
Break-even analysis calculates the point at which total revenues or benefits equal total costs, identifying the minimum utilization required to justify the investment.
A security training program costs $1,200 per crew member. If 18 crew members require training, what is the total training cost?
Answer: $21,600
$1,200 × 18 = $21,600 total training cost.
What is the primary purpose of establishing a contingency reserve within a ship security budget?
Answer: To cover unforeseen security expenditures not included in the base budget
A contingency reserve is set aside specifically to address unexpected security costs that were not anticipated during the budget planning cycle.
When comparing security service proposals, an SSO should evaluate 'total cost of ownership' rather than unit price alone because:
Answer: Hidden costs such as integration, training, and support can significantly affect overall expenditure
Total cost of ownership reveals ancillary expenses like installation, training, and ongoing support that are not reflected in the unit price, enabling more accurate comparisons.
An SSO negotiates a contract where the vendor absorbs all cost overruns above the agreed price. Which contract type has been selected?
Answer: Firm-fixed-price contract
A firm-fixed-price contract places all financial risk of cost overruns on the vendor, who must deliver at the agreed price regardless of actual costs incurred.
During an annual security budget review, an SSO discovers that actual costs were 8% under budget. Which is the most appropriate response?
Answer: Analyze the causes of underspending and report findings to management with recommendations
Underspending warrants the same analytical rigor as overspending—understanding the causes informs future planning and demonstrates financial stewardship.