(3) The cost of addressing, sealing, stamping, and mailing.
The third item is the only one that offers any difficulty. Included in it are first the direct labor—the wages of the human beings employed; and, second, the overhead expense. The second item includes the value of the space occupied by the letter force, the depreciation on the equipment, and finally the supervision and the executive expense properly chargeable to the department. Unless an accurate cost system is in force the third item cannot be accurately calculated. The best that can be done is to take the salaries of the people actually employed on the work and guess at the proper charge for the space. The sum of the three items divided by the number of letters is the cost per letter. It is not an accurate cost. It will be low rather than high, for probably the full share of overhead expense will not be charged.
It will be obvious, however, that the place to send out circular letters is not a room in a high-priced office building, unless the sending is an occasional rather than a steady practice. Costs in this work are cut by better planning of the work and facilities, setting work standards, paying a bonus in excess of the standards, and by the introduction of automatic machinery. The Post Office now permits, under certain conditions, the use of a machine which prints a stamp that is really a frank. This is now being used very generally by concerns which have a heavy outgoing mail. Then there are sealing machines, work conveyors, and numerous other mechanical and physical arrangements which operate to reduce the costs. They are useful, however, only if the output be very large indeed.
The personally dictated letter has these costs:
(1) The postage.
(2) The stationery.
(3) The dictator's time—both in dictating and signing.
(4) The stenographer's time.
(5) The direct overhead expense, which includes the space occupied, the supervision, the executive overhead, and like items.
The troublesome items here are numbers three and five. If the dictator is a correspondent then the calculation of how much it costs him to dictate a letter is his salary plus the overhead on the space that he occupies, divided by the number of letters that he writes in an average month. It takes him longer to write a long than a short letter, but routine letters will average fairly over a period of a month. But an executive who writes only letters that cannot be written by correspondents or lower salaried men commonly does so many other things in the course of a day that although his average time of dictation per letter may be ascertained and a cost gotten at, the figure will not be a true cost, for the dictation of an important letter comes only after a consideration of the subject matter which commonly takes much longer than the actual dictation. And then, again, the higher executive is usually an erratic letter writer—he may take two minutes or twenty minutes over an ordinary ten-line letter. Some men read their letters very carefully after transcription. The cost of this must also be reckoned in.