I price things at the maximum the market will bear, because you can always put things on sale but can’t realistically just up the price on an in-stock item.
If you make something by hand that is special, time and materials is just a small part of the calculation, IMO. You should not be trying to factor in the cost of your tools and working in some calculation to “pay for it” all.
Instead, I think you need to price something high enough to make the buyer feel they got something special. Make it hurt, just a little, to buy your thing. This may seem counterintuitive, but if you make an awesome pen and sell it for $10, then a person will buy it and not actually treasure it because it’s too close to being disposable. If you take that same pen and make it $40, or $100, then fewer people will buy it but those that do will feel special, and will be more likely to buy something else from you to get that specialness again.
I make decks of cards, and I know exactly what they cost to produce. I once made a deck that was purposefully “cheap” ($6.95) and while it sold well, no one really got excited about it and I still have some in stock after several years. Conversely, I’ve sold decks for $30 a piece and I can sell 1000 of those in a day, because they are perceived as rare, collectible, and special.
Don’t sell yourself short, and don’t be afraid to talk about how special your items are.