I think Julia said it well but let me add something. When I dwelled on cost and production I lost the love of decorating cookies. Now that I do it for myself the enjoyment of decorating is returning.
I believe (and know) one can do both though, and I personally think everyone out there baking (as other than a stated hobby) must focus on cost. I knew the costs of doing things inside and out when I had my bakery AND I still loved what I did - even the costing part! When you don't focus on costs, it's easy to get bitter because you feel like you're always getting underpaid, or to get anxious because you're not charging enough to keep the business afloat. Knowing the numbers allows a business owner to understand and state her full worth (it's empowering and uplifting)! And, when you project more confidence in the value of your product, you will find more people willing to pay the price.