DVD Heaven Sells New and Used DVDs, Particularly to University

question 189

Multiple Choice

DVD Heaven sells new and used DVDs, particularly to university and college students in large Canadian cities. It plans to expand its business online, hoping to increase sales by offering a more convenient means of ordering for busy college students. The president of DVD Heaven has been talking to several other business owners, and now expresses some concerns over developing the e-commerce side of the business. The vice-president argues that it is essential for continued growth, but the president argues that there are too many consumer concerns.
Which of the following statements, if true, would not support the argument being made by the president regarding consumer concerns?

• A) Fraudulent businesses are being set up and run on the Internet. Many consumers would rather enter a building that houses a business they know really exists.
• B) Identity theft and the theft of credit card numbers can occur when ordering online.
• C) Privacy can be compromised on the Internet, and unethical e-businesses can track or sell sensitive information such as buying patterns.
• D) College students are five times more likely to order over the Internet than older adults.
• E) Customers like to see and feel products before ordering them.

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Definitions:

Batch Level Activity

Operations or tasks that are performed on groups of products together, typically as a step within the production process, where costs are incurred for the batch as a whole rather than for individual units.

Unit Level Activity

Activities that vary with the number of units produced or sold, directly impacting the cost of goods or services.

Direct Labour-Hours

The total hours worked by employees that can be directly attributed to the production of goods or services.

Overhead Activity

Activities that incur indirect costs, not directly traceable to a product or service but necessary for the production process or service delivery.