We revisit our original papers on the burst mode of accretion by incorporating a detailed energy balance equation into a thin-disk model for the formation and evolution of circumstellar disks around low-mass protostars. Our model includes the effect of radiative cooling, viscous and shock heating, and heating due to stellar and background irradiation. Following the collapse from the prestellar phase allows us to model the early embedded phase of disk formation and evolution. During this time, the disk is susceptible to fragmentation, depending upon the properties of the initial prestellar core. Globally, we find that higher initial core angular momentum and mass content favors more fragmentation, but higher levels of background radiation can moderate the tendency to fragment. A higher rate of mass infall onto the disk than that onto the star is a necessary but not a sufficient condition for disk fragmentation. More locally, both the Toomre Q-parameter needs to be below a critical value and the local cooling time needs to be shorter than a few times the local dynamical time. Fragments that form during the early embedded phase tend to be driven into the inner disk regions and likely trigger mass accretion and luminosity bursts that are similar in magnitude to FU-Orionis-type or EX-Lupi-like events. Disk accretion is shown to be an intrinsically variable process, thanks to disk fragmentation, nonaxisymmetric structure, and the effect of gravitational torques. The additional effect of a generic α-type viscosity acts to reduce burst frequency and accretion variability, and is likely to not be viable for values of α significantly greater than 0.01.