If people don't make quilts they have no idea how much fabric, thread, batting, etc. costs. They also have no idea how much time and effort is put into making one. People tend to relate price of quilt to cost of China made items.
I hope this does not become a problem between you and your friend. This is one reason I do not make quilts for sale. I make what I want when I want to. I give 90% of what I make to charity and am glad to do it as I feel blessed and enjoy helping others who are in need. I think I would have told my friend that it was going to cost a great deal to make a quilt and see if she was still interested. I would have put some charge for your work for no other reason than to help purchase more fabric or whatever for future purchases. Again, she is lucky to have a friend who would do this for her.