I haven't read all the replies yet, but since she insisted on paying you at the very least have her pay all cost of all materials, including however many spools of thread, and all sales tax if you have that in your state. I would suggest if you are purchasing when she is with you she could just pay, if you are making the purchase keep the receipt and have her pay you the total. Then I would suggest you check with 3-4 quilters in your area who quilt for pay LA or those who do so on dm. With that there should be a range in prices: I know many LA charge a range basic lowest price is usually a straight stitch in the ditch or grid, custom work is a design such as echo or feathers or any other thing besides straight stitching. This way you have an ideal of what the cost would be for commissioned work minus your labor.
At the very least you should have her pay for materials involved since she is making the request and offered to pay for it. Once she has paid for cost of all materials you can if you want offer to quilt at no charge but let her know about what the cost would be if she wants to pay for the quilting too. If you do all of this, she knows what all of the material, batting, and thread costs; and if others (his niece, 2nd cousin, etc.)want you to make them a quilt you would have an idea of what it would actually cost. I would also suggest you keep track of how many hours you spend preparing, sewing the top, and putting everything together. Because if others want to ask you to make them a quilt they should also be paying you for your time, even if it is lower than minimum wage you should be getting something for it in a commission.