When using the two point method of cost estimation or the high low method, the calculation to derive the variable cost component of a mixed cost is: change in cost ÷ change in cost driver.

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The two-point method of cost estimation, also known as the high-low method, is a method of estimating the variable cost component of a mixed cost by using two data points: one from a high level of activity and one from a low level of activity. The variable cost component is calculated as the change in cost divided by the change in cost driver.

When Using the Two Point Method of Cost Estimation or the High