Publications
Publications
- November 1990 (Revised September 2004)
- HBS Case Collection
Circuit City Stores, Inc. (A)
By: William J. Bruns Jr. and Susan Harmeling
Abstract
Circuit City sells consumer electronic equipment, appliances, and extended service and warranty contracts which supplement those provided by equipment manufacturers. Equipment is sold at low margins, while warranties carry very high margins. A question has been raised about the proper method for recognizing revenues on the warranty portion of the combined sale. Deferring revenue will cut profit reported at the time of sales but may better match costs of warranty service.
Keywords
Sales; Cost; Profit; Financial Statements; Revenue; Marketing Strategy; Electronics Industry; Consumer Products Industry
Citation
Bruns, William J., Jr., and Susan Harmeling. "Circuit City Stores, Inc. (A)." Harvard Business School Case 191-086, November 1990. (Revised September 2004.)