a circular letter--one that is sent out in
quantities without any effort to secure a personal effect. The items of
cost are:
(1) The postage.
(2) The paper and printing.
(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 l
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