Hi,
You can either backup the entire Azure VM, or only the SQL database, or both, the backups can be separate backup jobs.
The pricing is per instance depending on its size + the storage consumed.
When backing-up an SQL Server, the size of the databases configured for backup determine the data size.
Azure Backup pricing
https://azure.microsoft.com/en-us/pricing/details/backup
I'd say backing up only the SQL Server databases is better and easier to maintain.
https://learn.microsoft.com/en-us/azure/azure-sql/virtual-machines/windows/backup-restore
Best regards,
Leon