I applaud the pricing levels you're trying here. In the grand scheme of things, it's what's necessary to actually make the effort worthwhile. It's not short-changing yourself on the PCB design itself, which should have some kind of value beyond what the circuit board is actually costing. As a business you have to account for various costs -- fees, taxes (35-45% combined fed, state, local, ss/medicare). There's liability with a product that plugs into mains voltage. Then respect that diagnostic tools are a low volume, specialized product. Some people will be priced out I'd imagine, but people that see value in time it saves them will still buy.
In 2009 I had bought someone's diagnostic tool (bare board + programmed PIC) for $130 and was content with the price, understanding it was a unique design and the board took effort (ie. "The artist should be paid for their work"). For my own diagnostic tool offerings though, I ended up doing exactly what I told myself I wouldn't do -- getting caught up in seeing other people doing similar things price at 3-4x material cost and having a lot of interest/sales, even though they were short-changing themselves. Looking back, I didn't need to force sales like that if the price didn't work for me. But you get caught up in just wanting to make a sale, or have interest/attention on a product.. or trying to "beat" competition at the "lower-the-price and gain the market game" that people play. Leads to thin profits on volumes of what is sold, a ton of time invested in packaging/shipping dozens of packages a week and burning yourself out for $5-10/hr when all is said-and-done.
I'm still trying to dig myself out of this trap today. No need to force sales if something can't sell at a price that works. It's not actually a bad thing if something doesn't sell in huge volume, as it frees up your time. My advice -- hold the line on whatever pricing YOU NEED to make something worth the effort. It's way too easy to let that slip. Wish I could go back and give myself that advice, but then again, I've also learned what selling in volume is like and it's pushed me to be more efficient at what I'm doing and to get a bit wiser with things going forward.. so not all for naught