there are many things to consider when trying to figure out price. your hourly rate, margin, overhead, materials and taxes are just a small bit of that. I will give an example.
lets say i want to make a website for someone, they have a budget of $400. it's going to be an oscommerce site with a forum and blog and they want to have a really niftly looking site. My hourly i charge is $20/hour, and if they want custom art that requires an art fee of $100 for exclusivity to the design. Most of the scripts are free so it's just getting them to work properly (about 2 hours). and another hour for proofs, 4 hours for revisions and 6 hours for final revisions, coding and fixing the site to work correctly. thats 12 hours ($240), nothing for materials, an art fee ($100) and my overhead, my overhead (cost of the shop on an hourly basis which is $120 for this job) and finally my margin which i have as a 40% margin of costs. (at an estimated $460 for the job ... it easily puts it at $644 or 650 for ease of bidding) thats way out of his price range, so just consider that overhead and hourly should always be included and the rest is a flexible number. I can always remove the exclusive art part for customers that want illustrations and design work, but can't afford it (it then goes to stock art) and margin is to cover hidden costs of running and to provide a buffer incase jobs run too long or materials too high. In this example i would tell them that the cost for doing the site to 100% done is going to cost $550 (reducing the margin some) i would tell them that if they wanted the site without the exclusive art it would be $450 and that is the lowest i can go.
the important thing is to try to communicate with your client. and to figure out your actual costs. If it took you 100 hours to make that site ... working for $2/hr seems a little funny to me. so keep in mind that you need to get paid fairly atleast ... and explain that to them. Also, giving estimates before the work is started also helps you in the long run.