If it's more than you want to pay then fine, you aren't obligated to buy from her and a polite 'no thanks, we don't have the budget for that I'm afraid' or some such will be fine. I'd say YABU to say she's taking the piss- it's her business so she can set her prices as she sees fit. It would have been helpful to give you an estimate initially so you could see if you were on the same page before working out a detailed quote.
Most people grossly undercharge for hand made items and so around £16 per piece will seem extortionate to many people. It depends what srt of quality that £16 buys you, but it's not out of the realms of the ordinary in my experience. I've closed my business now but made bridal accessories for several years, and had no trouble selling at that sort of price. Yes some people sell for much less, but this was my full time business and sole income so I sold for a price that my customers would pay, and made it worth the time and effort for me.
Swarovski pearl bracelet with silver plated clasp (sterling silver cost more)- my selling price was around £18 exc. postage. Broken down roughly as follows:
Materials cost (Swarovski pearls, stringing material, clasp, extender, other findings)- £4
Good quality jewellery box, anti tarnish tab, ribbon etc £2
Postage costs to me of having supplies delivered- varied from £0 if I happen to have everything in stock (rare!), up to maybe £7 if I need a couple of things so I averaged it out to £2 per item.
My time in making it (includes time spent liaising with customer re: colour choices, obtaining wrist measurement, sourcing/ ordering supplies, making the item, taking it to the post office etc)- £10 (my hourly rate- though the actual time taken for all of this, start to finish, would rarely be as little as an hour)
Total £18 (I'd then have around £1 in costs such as paypal fees and product liability insurance).