Jahan is level 14 and has crafting and blacksmith skill5. He made some 1h axes from steel bars. The prize of the axes did not go up when I sharpened them at a wheatstone but the damage did go up. At lower blacksmith and character level, the prize of a weapon went up when I sharpened it. I mean the prize shown at the item itself. I did not test it at a shop.
Prof. Dr. Dr. Mad S. Tist
World leading expert of artificial stupidity. Because there are too many people who work on artificial intelligence already
Prof. Dr. Dr. Mad S. Tist 
