I don’t think you Mum is unreasonable to maybe not know how much the materials cost or the time it takes, or how much it might be worth. Lots of people don’t know what art is worth.
This is very true. Whether it's art materials, wool, cake ingredients or whatever, people have it in their mind that it's 'just a little hobby' - and hobbies that you do at home are basically free.
This doesn't make it right, though. Somebody old enough to be a grandmother should at least have an idea that the materials could cost a significant amount. Even if it had been 'stuff that she already had in', that still means that whatever she uses for this job, she will have to pay to replace.
Just put it down to experience. Your mum has a lovely painting done by her granddaughter and your daughter has added to her portfolio.
To be honest, I find this rather patronising (the last part). It was definitely the daughter doing the gran a big favour; it wasn't the gran being magnanimous in 'allowing' her granddaughter to do it for her. She could have gained just as much experience in creating it for an actual paying customer.
This just sounds like the same attitude as used by self-appointed social media 'influencers', when they try to blag freebies 'in exchange for valuable exposure for you'.