The Kendall Equipment Company manufactures lathes, routers, saws, and other woodworking equipment. The company’s controller imported its weekly manufacturing data from the past two years into Excel. The data included materials handling costs, number of parts moved, weight of parts, and volume of parts. The controller used the CORREL function to help to determine which variable would be the best allocation base for its material handling costs. Following are the results of the CORREL function in the controller’s analysis.

Rank the four variables from the most highly correlated with materials handling costs to the least correlated. Which variable would you recommend that be used as the allocation base for materials handling costs?

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1 Week 5767GWNI 2 3 4 8 A 9 C Materials handling Number of parts moved 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ 7 $ 8 $ costs 2,329 6,346 7,548 2,169 4,514 2,644 4,928 6,241 611 884 923 445 399 350 275 744 D Weight of parts (pounds) 448 1,183 1,753 374 756 488 1,905 1,944 Volume of parts (pallets) 650 1,729 804 651 1,177 772 1,273 1,749 Time spent (hours) 235 373 437 124 231 153 292 347 G H Correlation: # of parts Correlation: Weight Correlation: Volume Correlation: Time Correlation Coefficient 0.35 0.82 0.96 0.59