Pricing

I was reading this article today why-so-expensive, which although it relates to cake making I think is relevant to all sectors of the craft market.
Although I try to get the best value fabric I can, to get good quality fabric you need to pay for it. I also find it really hard to determine how much time I spend making a bag - with some designs I can make a few in an evening (I have a day job too, so tend to measure sewing time in evenings!) BUT that doesn't take into account the many evenings I have spent playing with the pattern and making rough versions to get the shape and size right.
I never know how much to account for my time in pricing - most of the time it is probably below minimum wage.

So how do you work out how much to charge for items ?