This is a topic that comes up whenever two or more professional artists/crafters get together. What’s a good pricing formula?
I’ll admit upfront that I don’t have all (or maybe any) of the answers to the pricing dilemmas, but thought I’d point you toward some resources that I’ve found useful.
In the Etsy Storque, there are many pricing related articles, I think the older ones are the most helpful:
Etsy Storque Pricing Articles

Also, an Etsy seller, chrisparry, developed a very detailed spreadsheet that they are offering for free that helps calculate selling price:
chrisparry blog

I have a few issues with this formula, at least for my personal situation. I’m sure it works great for some types of items. I think the spreadsheet recommends taking equipment into consideration. That part is good advice, but it says, for example, that I’d need a new sewing machine every 5 years. Don’t think so. The machine I have now was my mom’s, and I believe she had it since before I was born, so it’s well over 30 years old, and works just dandy (thank you very much). I understand that someday it’s inevitable that I’ll need new equipment, and I need rotary blade, etc. rather more frequently, and all that needs to be accounted for.
I also have a bit of a philosophical problem with the “decide how much money you want to make then divide that buy how much stuff you make” philosophy. I’ve seen this advice in many places, and it never sits well with me. Just because I’d need to sell my I-spy blankets for $80.00 each to replace my job and live my dream of working at home does not make them ‘worth’ $80.00, no matter how much love I pour into them. Don’t get me wrong, I love my blankets. If I could make only one thing, that’s what I’d pick. My daughter still plays with hers all the time after 4 years. But, come on.
Sure, maybe someplace there is some celebrity super-high-end market for an $80.00 I spy blanket, but I have zero interest in finding, developing, or catering to such a market if one exists. It isn’t me. And I don’t want to change who I am for this.

Now these types of decisions are very personal. I don’t presume to tell anyone how they should run their business. Pricing is complicated, and I don’t believe in a one-size-fits-all formula, even for businesses that sell similar items or services.

What I’ve learned, for my own business, from my pricing research is that, no matter what formula I use, I will NEVER be able to give up my job to come home and sew.
I wanted to be a professional, but I’m a hobbyist. I was upset at this realization for about 30 min. Now I’m okay with it. The upside of these epiphanies is that now that I know that sewing isn’t the most efficient use of my time in my quest to work from home, I’m free to move on to other endeavors. Now I can sew for fun, for family, and to sell with out all the pressure. I can make things when I want, for whom I want, and if they sell – wonderful! If not, it’ll make a nice gift at the next baby shower I’m invited to. But my garbage bill won’t depend on it.