Well, that sounds so cheap to me. Knitting may be a pleasure for you but it is a talent. You should be well compensated for it. What would be a good hourly wage to you? Remember you also need to package and ship these items, so you need to figure the time that takes too.
Is a long evening in front of the TV set about 3-4 hours? And can you package up a set and get to the post office and back in an hour? I think getting less than $5 an hour plus materials is really under-selling your time and your talent.