$500 for adjustable sights is probably cheap. The whole thing is about the machining time. That runs over $100 per hour plus set up time these days. I'd guess a lot would depend on what single action it is too.
Right.
At today's labor rates, and the cost of a low volume item like a custom adjustable sight, AND considering it will probably call for a new front sight, not an unreasonable price.
"Back in the day" we used to mill the top straps and put S&W sights on Colt SAAs. Milling and drilling and tapping a case-hardened frame was a lot of fun. Nowadays, with the cost of machine time and carbide end mills, it would be quite a spendy proposition.
Get a flat rate rather than hourly quote. i milled one gun for some fancy rear sights and it was no fun. Generally it's easy, but that steel was tough and killed a couple of dovetail bits.