If your company had no accountants, how would it know whether the processes it was using made it cheaper, or more expensive to produce the products? Would you have engineers spend part of their time tallying up things? If so, what would they call that task “accounting”? Would that have been the best use of engineers’ time? Would you trust creative engineers to with the detailed work of accounting? Is everyone capable of doing engineering work? If someone can’t do engineering, but could do the counting — wouldn’t it make sense to have some specialization of tasks?
(I’ve already said enough about dead-weight costs owing to government regulation. I don’t disagree with you there.)
Your questions are very valid. This outfit dealt only with custom designed complex machinery. Each machine was built with different set of parts. In such situations it is very difficult to pin point what a new order for a machine should be sold for. Each machine had between 2000 & 3000 parts. Some parts were bought ready to assemble, others manufactured in house.
It is a waste of time in such situations trying to pin point exact cost of making one particular machine since exact duplicate machine would not be made again. However the sales department must know what to sell the machine for. Accounting department was no help since they had no clue what the new machine needed. So, the job fell to engineering department to prepare a preliminary design of major components needed. The most important parameter was total weight which typically between 200,00 to 1,000,000 pounds, mostly steel. Then adding other components such as motors, gears, bearings, electricals, etc. we could compute material cost. Engineering and manufacturing labor was determined based on complexity of the machine.
Note that accountants had no clue what the machine should be sold for. Their job was primarily figuring profits during the fiscal year, using actual dollars spent and received during the period, and prepare taxes to be paid taking into account depreciation of machinery and building etc. If there were no tax laws on profits, we could eliminate the entire accounting department and not lose anything.
For the bottom line for each machine to be profitable, it totally depends on how well it was designed to facilitate manufacturing, and how efficiently it was manufactured. That is what makes a difference between good profit, mediocre profit or loss on any particular machine.