Southwest Airline Co and Cost Accounting Essay Example for Free

southwestern United States Airline Co and Cost Accounting experiment southwestern Airline Co. is a major passenger airline that provides scheduled air transportation in the United States. Southwest provides point-to-point service which allows the use of key assets, including aircrafts, gates, employees, and the ability to provide frequent, conveniently- timed flights and low fares. Southwest Airlines has built its culture from the inside out and believes that the satisfied employees will keep customers coming back.Southwest Airlines operates with a low- personify structure that is designed to allow it to charge low airfares. With that said, cost accounting disregard know a pervasive influence in this and other organizations. From the companys 2006 annual report-Disclosure Regarding Forward-Looking Information, event 1A. Risk Factors fuel price volatility presents one of the companys most significant challenges. Southwest for the past five years of this annual report, has h edged its fuel risk as part of its alienated cost strategy. While this also demonstrates the use of cost accounting, the company entered into fuel derivatives contracts to protect against rising fuel costs.Southwest Airlines uses cost accountants in contributing to the external financial reports such as inventory evaluation as noted on page 55, under Notes Consolidated Financial Statements (Continued) Inventories, which consists of flight equipment expendable parts, materials, aircraft fuel, and supplies. The cost accountant determines the valuation method that is in the best interest of the company and favorable to the stockholder. There is an proceeds to having cost accountants, they create reports used strictly for internal use and are not restricted to broadly speaking accepted accounting principles (GAAP).A cost accountant is free is use any costing epitome that will result in an informative report for management. Such reports may consist of, but especial(a) to job costi ng, direct costing, activity-based costing, process costing and more. Unlike internal reports, external reports are formatted and defined by GAAPCost accountants focus on providing information for management decision fashioning. The cost accountant can contribute several types of costing information to the planning process that are of assistance in making strategy alterations that will result in enhanced levels of profitability or the avoidance of low-profit strategy alternatives.