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?

Rank the four variables in order, with "1" being the most highly correlated with materials handling costs and "4" being the least correlated with materials handling costs.

Which variable would you recommend that be used as the allocation base for materials handling costs?

B D E F G H Materials handling Number of parts Weight of parts costs moved (pounds) Volume of parts (pallets) Time spent (hours) Correlation Coefficient Week 1 2 1$ 2,329 611 448 650 235 Correlation: # of parts 0.35 3 2 $ 6,346 884 1,183 1,729 373 4 3$ 7,548 923 1,753 804 437 Correlation: Weight 0.82 5 4 $ 2,169 445 374 651 124 6 5$ 4,514 399 756 1,177 231 Correlation: Volume 0.96 7 6 $ 2,644 350 488 772 153 8 7$ 4,928 275 1,905 1,273 292 Correlation: Time 0.59 9 8 $ 6,241 744 1,944 1,749 347 1. 2. 3. 4. Number of parts moved Whic Time spent (hours) E Volume of parts (pallets) Weight of parts (pounds) "1" being the most highly correlated with materials handling costs and "4" being the least correlated w Number of parts moved Time spent (hours) Volume of parts (pallets) Weight of parts (pounds) d that be used as the allocation base for materials handling costs? is the most highly correlated variable with materials handling costs and should be used as the allocation base