Estimate how many hours you will need to do the conversion. Then determine what hourly rate you need to make the job worthwhile.
Then decide whether you want to charge a fixed price ($100 for example) or by the hour. It's easier to sell the job with a fixed price because the customer knows what he is going to pay. But you assume the risk if the job is harder than anticipated.
In any event, be sure you both understand what is and is not included in any fixed price job. For example, who pays if additional parts are required? What if a part doesn't fit and another must be ordered?
200 on top of parts is way too much. bike shops charge that much bc they have so much overhead to deal with. i think charging 100 for labor is even pushing it, and wheel building labor isnt really all that much from a LBS anyways...
over the summer i was buying used bikes and converting them to fixies, i would sell them for $200-250 depending on the bike. it made a lot of people happy.