Your DD should ask the retiring co worker how she liked the wall hanging she designed and made for her friend to give to her.

i hope your dd made a label and signed her name so important tp put your name on things

Is your DD unhappy with the $40?? If not, let it be. It's between your DD and her co-worker, not you.

That's just like an afghan I once crocheted for a co-worker. She wanted a copy of the one her grandmother made. I even used my own yarn and got all of $40, too.

Sometimes I do things for others just for the challenge. I think that's part of a creative person's personality.

I was just
learning to quilt ans my friend asked if I could make her one. I did not set a price it was hand quilted and I bought all the fabric. she gave me $20.00 she said that is what Walmart sells them for. I smiled said thank you that will buy the batting and vowed not to make her anything more.

I was asked to do a baby quilt for a quilter and all she gave me was $20 after I supplied everything. She loved it and said my grandson wants one for himself and guess what I replied to myself , "Fool me once shame on you . Fool me twice shame on me. " that was two years ago.

If I don't want to do it, I usually quote a really high price and that scares they away. I have a friend that ask and when I told him what the going price of fabric alone was, he said "I can't afford you." We had a good laugh about that.
But...sometimes they don't bat an eye and give me what I quoted. LOL Always get at least half of the price though.

I do the same. It's something to do. I don't make labels, once the object is given away, I don't care what the recipient does with it. I had the fun of making it.

If the friend only paid $40, does that include other favors the friend might do for your daughter? Maybe she helps with watching kids, or other small favors that mean a lot to your daughter. That's still quid pro quo if not quilting.

If I don't want to do it, I say so.

A lady I work with had a friend that had a very old quilt top she wanted hand quilted. My co-worker brought it to work and ask if I would be interested in quilting the piece. I told her that because I work, it takes me a very long time to complete each of my own quilts (done by hand), and that I started so late that my goal in life was to complete a quilt for each of my kids and grandkids before I die. No way would I be able to quilt for someone else. I advised her to look online and see if she could send it off to the Amish to do, but to not be shocked at the cost. What she was asking for was hand work by a skilled craftsman. I never heard if she managed to get it quilted or not.

So, from my experience, those who don't quilt, really have no idea what all goes into it. Explaining the process and agreeing on a price up front seems like the only way to avoid hurt feelings and allow for both sides to be happy with the outcome.