THE APPLICATION OF VARIABLE COSTING AND COST CONCEPTS IN MANAGERIAL ACCOUNTING AS A BASIS FOR DETERMINING PRODUCTION COSTS AND CORPORATE DECISION-MAKING: A LITERATURE REVIEW

Abstract

Determining the cost of production is an important aspect of managerial accounting because it is related to cost control, selling price determination, and corporate decision-making. One method used to calculate production costs is variable costing, which includes variable manufacturing costs in product costs while treating fixed manufacturing costs as period expenses. This article aims to analyze the application of variable costing and cost concepts in managerial accounting and explain the usefulness of the resulting information for corporate decision-making. This study employs a literature review with a descriptive qualitative approach by examining relevant journal articles published between 2020 and 2025. The analysis identifies the focus, findings, similarities, and differences among previous studies. The review indicates that variable costing helps companies identify variable manufacturing costs more clearly, evaluate production expenditures, and provide information for considering selling prices and operational decisions. Differences between the results of variable costing and full costing primarily arise from the different treatment of fixed manufacturing costs. Therefore, the application of variable costing should be supported by accurate cost classification and aligned with the purpose of the analysis so that the resulting information can be used effectively by management.