This approach, while good for setting a lower bounds for what's sustainable, is rarely how you should first price things.
I run a small side business. My initial customers I priced like this. After the first year, I realized I was leaving a lot of money on the table - my business was niche and not commoditized, and my customers were willing to pay quite a lot more for the service.
I grandfathered in the first year customers and re-structured my pricing to be more "value based" - how much were my customers actually willing to pay for the service, i.e. how much was it worth to them.
It took a little while to figure out good price points, and there was a short period of time when I'm sure I lost some customers because prices were too high, but in general, my margins are significantly higher by charging customers based on their percieved value, as opposed to just covering my costs with a fixed margin. The customers don't even mind, because in their minds, the price is good value.
It's important to do this not just for its money-making potential - it creates a better impression of "value" for your product, and people value things that they pay more money for. Underpricing can cheapen people's perspective of your product, and de-value your time.
Minimum margins are for commodity businesses - where there are lots of competitors and customers can switch easily. For anything else, you can earn more money by considering "value pricing" based on talking to your customers and finding out their pricing tolerance.