As a knife maker (who is not doing business here until I purchase the proper membership) I cannot speak for production knives, but I can speak for handmade knives to a degree. I've obsessed over breaking down costs numerous times so I consider myself somewhat well-prepared to answer this question.
If you purchase a large sheet of steel, rather than "convenience pieces" from high-priced retailers, you may be out $5 for the blade steel--but that's just the blade steel.
A 12"x12" sheet of Ultrex micarta is around $50 if I recall correctly, and I can generally get about 10 sets of handle scales from a piece that big, so if we do the math, that's $5 in micarta per knife.
We can assume that you'll use a buck or two in G-flex epoxy.
Loveless bolts are $2 a piece, and I use two per knife, which is $4
Lanyard tubing is about $1 per inch, let's say, unless you're buying in bulk.
Kydex is cheap, a sheath sized piece might be $2 and eyelets are 10 cents each and that isn't even worth including.
So let's round up and say that we're at about $20 in raw material so far. But you aren't going to make knives by shaping them with your bare hands. You need tools and consumable materials and so forth...
A ceramic belt for a 2x72 grinder is about $7 on average, and during the making of one singular knife you're likely to create the equivalent of one belt's worth of wear, due to partially using up more than one belt, so to speak.
Sandpaper is cheap but let's say you'll use about $1 worth.
Heat treat varies, because some people do it themselves, some people pay another individual to do it, and some rely on industrial services like Peters, so let's say that on average, whether it's from running the oven, using stainless tool wrap or paying someone else, heat treat costs $10 roughly.
This puts us, very roughly, at $40 in cost of materials, consumable resources and heat treat. Great! So why can't you just buy a fine handmade Woodlore or Loveless style knife for $40?
Well, you see, there are these pesky things called workers, and unfortunately they have to be given a few bucks for their trouble. Making a good knife takes time, and for some people it may take less or more time, but let's say for example that it takes 8 hours to make one singular knife, and if a knife maker is giving himself, say, $20 an hour for his craft, his knife comes out to about $200 in cost. Now if he goes to the post office and stuffs it in a small flat rate box, that's another $10, which puts his net profit at about $150 give or take.
This isn't even considering other expenses like the cost of new tools, replacing semi-consumable items like drill bits, and paying goddamn taxes on everything you do.
I'm starting to realize that certain people make that much (or more) working at Walmart... I'm kind of depressed now.
.......Worth a drop in pay to work at home...
Their average US customer seems happy to pay that much, as they sell well.
