A friend of mine works for Burberry on their handbags. They are high quality, the materials are hand-selected, it’s hand-finished and so on, but even with that amount of labour it’s probably only around £100-200 in costs.
They do focus groups where they show people the handbag and ask them how much they think it should cost (multiple choice: £800, £1500, £2000 was the example she gave IIRC).
People invariably pick the highest option, and when asked why, they say it’s because they want people to know they’ve got an expensive handbag.