I also think you are underpricing your labor.
I was working on a GFG top all hand pieced, partially sewed together plus lots of flowers completed but not joined. It got stolen and when I called the quilt shop they said $800 to $1500 and I submitted $800 to the insurance company and they did not even question it. Since then I have felt I should have put in for more towards the high end, but it's done.
I would get her to pay for the material upfront or buy it herself. Others are right, you don't want to get caught holding the bag if your friend changes her mind.