I have found that saying, "I don't quilt for money. If you really want one, I will show you how to do it." usually solves the problem.

If you do decide to do it, set your price high and use an approximation ("It may cost as much as $300 for my time and additional materials.") And get a deposit of at least 1/2 of the price you quote. Also, make clear that you won't deliver the finished quilt until you are paid in full.

You can google t-shirt quilts and find what others are charging for similar projects. I agree, this type of quilt can be very challenging.

I like the idea of block and applique. You can make all the clothes and bibs into hearts and applique them on.

I think I would charge between $50- $100 since I am new to quilting too and I look at it this way. If I was not working on something, then I probably would be wasting time on the computer..LOL So I would not charge a lot until I was pretty good.

Are you going to be quilting it also? or just puting the top together. The price might change a bit if I was quilting it too.

I have done several but large twin size. The cost will not be in your material but in the amount of work and the wear on your tools and equipment. Also how big will the quilt be? I would at least charge $175 for 45x45 with warm and natural batting, Moda muslin on the back, rolled binding (back to front) and basic stippling, enough to secure it all.

Thank you everybody for all the feed-back. Very helpful, thank you, thank you :o
You all have definitely given me some ideas to ponder... I agree that I probably don't realize how daunting of a task this might be, considering that 1.) I am a new quilter, and 2.) the different types of fabric will be very challenging to work with. I didn't even consider how the different fabric types/weights would pose a problem..! (yes, I'm still learning)
So I'm just gonna keep it simple... I love the idea of using simple block and applique. I can definitely do that. And the quilting will be super basic; that is, if I don't decide to just tie it with yarn to save time.

It is very difficult to determine what to charge for a quilt. We do need the size. Is it a crib size or a car seat size or just a wrapping size? The other ladies can help you much better than I can.

I hate when someone wants to pay me to make a quilt! I have a neighbor that just found out her niece is pregnant, and has hinted about one! I agree that you just cant get what they're worth, even if they buy all the materials!

You mean $10 an hour, I hope.

I think you can do it. Charge between $10 to $15 since you are a beginner and you might spend......

Then, of course, you have to consider this is your sister and how close you two are. I don't have siblings so I could never consider charging them for anything. Possible encourage her to work together to make a quilt??

I made a T-shirt quilt for my granddaughter. Not fun! I've been sewing for 50 years and quilting for 20. Only way I'd make a quilt out of someone's clothes would be like men's/ladies clothes and then I would have to love them a lot.