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Leads normally did not qualify. It has to be narrowly targeted and the response needs to be tracked. The company ran various advertising commercials on the television with each commercial being given a separate toll free number. For each customer, the firm kept a track of prescription, doctor and insurance carrier. All customer names were maintained and separate coded order forms were kept track of. Calls made to the customers, insurance carriers and doctors were written off as administrative expenses which would generally fall under SGA expenses. This indicated that the initial expenses (direct response advertising campaigns) were expenses which need to be capitalized as they generate the continuous stream of revenues...
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