I think there are many more factors to consider. In my shop, we charge one price for a basic triple layer 8" cake with buttercream frosting. If a customer orders a 6 layer cake, it's twice the price at least, maybe more. The "labor intensive" part is not all about making the rainbow effect, although it does take time to correctly, evenly portion and color the batter. The added cost in terms of actual ingredients is the additional layers, and additional frosting. While those ingredients are not totally a double recipe (it's like a recipe and a half) it certainly does cost more! As to your time, it takes longer to portion the batter and color it, bake 6 pans, level, stack and frost 6 layers vs 3 layers. I think we also forget all the other costs, when someone dashes off a remark like it only takes 15 mins. No, it takes a longer amount of time for washing all the extra bowls and pans (water bills,electricity for the dishwasher, that costs you money), it takes more time in the oven using the gas or electric you're paying for. It needs a larger, higher box (our rainbow cake is about 10" high!). How do you expect to survive in this business, if you're not adding in all these costs? Water, gas, electricity, wear and tear on your equipment, your time spent purchasing, your time spent paying bills. The risks you take if you drop the darn thing. If you're in business for yourself, or you own a small bakery, ALL of these things cost you money. Sorry if I'm ranting, but I strongly resent the impression some customers have that this is as easy as what you remember your grandmother doing with a box of Duncan Hines, leisurely on a Sunday afternoon and therefore shouldn't really cost much for a cake. If it's so easy, go bake one, why are you in my store? Do you argue at the supermarket over how much a box of cereal costs? No, you just pay it. It's a business, we sell certain products, and to make a living, those products are for sale at a profit, not merely covering costs of ingredients. You're doing this particular business presumable because you love it. But it's a business nonetheless and you have to get adequately paid or you will soon be out of the business. Do you think Ron Ben-Isreal got his start giving away his early cakes under cost? I bet you he did not!
I think if customers were more educated by us as to ALL the costs involved in 'just baking a cake', instead of "oh it's only 15 mins to add some food coloring", it would go a long way towards everyone making a living! These TV shows don't help, because now the general public thinks Cupcake Wars is in real time, and it only takes an hour to bake and decorate 1000 cupcakes in 3 flavors with 3 different handmade decorations! How ridiculous. TV is not real life. Back to the rainbow cake, it's a 'specialty' cake, and should be charged as such, not merely a small add on to the cost of a regular cake. NYC prices, I charge $95, pre-decorations. It's a fad right now, people will pay if they want one. If I'm not going to make money on it above and beyond costs, why make the cake at all? The name of my bakery isn't Charity with Frosting on Top! If a customer won't pay you fairly, then toss some rainbow sprinkles on the outside of a regular cake and be done with it! At some point, take the leap, and don't bake anything you won't make money on. The only thing worse than not making money, is spending your own money to give away a cake to a stranger.
My 2 cents for what it's worth.