I wouldn't charge my MIL for making the quilt. Yes, I would have her pay for the fabric, including the backing and the batting if there's a specific kind of look she wants re the batting. The quilting itself is another story. I'd do Stitch in the Ditch myself but if she wants another pattern of quilting I'd confer with her on sending it out professionally.
Also, I'd tell her the work of putting it together is my offering to her.
I've made quilts for friends' grandchildren, fun quilts to make them smile. Charged only for the fabric.