In traditional cost accounting for manufacturing, categorizing costs as fixed or variable has been part of accepted practice for a long time. In recent years, the practice has diminished because this information was generally less useful or not timely enough for decision-making, and it is not required for regulated financial reporting. Also, the traditional calculation of fixed and variable costs has many flaws. However, if these flaws are corrected, insights into the nature of costs can contribute to better decisions and support operational improvements.
