This is a "classic" Montessori science activity that I hadn't put out yet this year. I set it up over the weekend and it's been lots of fun for the children. Below you can see how I set it up on my stationary shelf/table. Clockwise from top: wooden bowl with magnetic/non-magnetic objects to test; red tray with yellow magnet wand; basket for "non-magnetic" items; mat; basket for "magnetic" items.
To do this work the child simply uses the wand to test each item in the wooden bowl for its magnetic properties (or lack of magnetic properties). Then they place the item into the appropriate white basket. I drew labels for the baskets with markers. See photo below.
Below is a close-up of the items to sort.
Here's a close-up of the magnet wand I'm using. It was already in the classroom, but it is labelled "The Nature Company", so that is most likely a source for purchasing it if you're interested.