How would u handle someone crafting jewelry, and want to add a 100 GP gem he found into the jewelry. Would u make him pay 33g (1/3rd the price)?
To me it seem rather expensive for a setting for a Gem, but i also understand that poor craftmanship would lessen the value of the jewelry, even if the Gem itself is still worth 100g.
Any suggestions?
It is expensive to simply cut a gem, but to place the gem in a socket on the jewel, he would need to shape the said jewel, which could explain the high cost. Your method seems alright.
Figure out the difference in value between the old piece of jewelry and the new piece with the gem in it.
That is the "cost" of the work to add the gem. He has to pay 1/3 of that cost and follows the normal crafting rules for making the upgrade (make a check against the jewelry's DC, multiply result by DC, when it equals the cost in sp, he's made it).
The 100 gp worth of the gem should be allowed to count against the "upgrade" price that he has to pay, and the increased value of the new piece should be at least 300 gp. In other words, if he just works the gem for a while and the materials already present, and succeeds at the relevant checks, he makes the jewelry 300gp more valuable, and consumes his 100 gp gem in the process.
If he wants to turn a 100gp necklace into a 700gp necklace, he would have an upgrade cost of 200 gp (700-100 = 600, 600/3 = 200). Of that, he would only have to pay 100 gp, since the gem defrays the other 100.