If she reads some of the ads for quilts, she may be basing her offer on those prices.
You know, those "any size quilt for $49.99" ones
I think it is reasonable for you to clue her in on what your actual out-of-pocket expenses were to make it.
And then go into the time involved.
Then - I see four options:
1) Give it to her
2) Recover only the cost of materials
3) Recover the cost of materials plus maybe $0.05/hour for your time
4) Charge what it would cost to buy a similar quilt at a specialty store