I charge $30 for anniversary tiers, and that's a special lower rate for brides I've done cakes for. If she's offering $40 for a decorated cake, that seems fair. Just make sure that she knows what size a 6" cake is, a lot of times people don't realize how small it is.
I've decided to make it an 8 inch only because she offered me more than what I asked for this time only 
do you think I am being too nice? Now I have to make a police shirt cake covered in fondant & it's for about 70 people and the pan is a 17.2 x 12.7 x 2.7 it's really for roasting but it's the perfect size for what they want. Only I have no idea what to charge.
You need to figure your prices out before you start making cakes for people.
If she is willing to give you 40 for the cake that you've made her before, consider that the beginning of your market research. If you only want to charge her 30, then do that, but I wouldn't make a bigger cake for her. If she says she wants a 6" round, then make a 6" round.
I agree. How can you be selling cakes if you have absolutely no sort of pricing structure at all?
Giving a customer a cake twice as big as the one she ordered for the same amount of money because you wanted to be nice...... well, ummmm..... No. Comment.
There are many of posts on here about pricing, how to figure pricing and so on. Before you start selling cakes I'd sit down and figure out what your price will be. You will have a better chance of sticking to it and being consisant with it if you have your numbers infront of you.
If a customer orders a certain size you give them that size. If she wants to pay for a 6in then she gets a 6in. If you make them a cake for 25 servings then they pay for 25 servings.
The only exception to this rule would be if they wanted a serving size that fits inbetween. As an example (sorry I don't know cake servings off the top of my head) they want 15 servings but you offer a cake that is 10 servings or 20 servings. If they go with the size that is 20 servings, they pay for 20 servings, not just the 15 they ordered.
I have to ask though, if she is offering your $40, why in the world do you think $30 is overpriced? Apparently she likes your cakes and thought $40 is a fair price.
I've decided to make it an 8 inch only because she offered me more than what I asked for this time only
do you think I am being too nice? Now I have to make a police shirt cake covered in fondant & it's for about 70 people and the pan is a 17.2 x 12.7 x 2.7 it's really for roasting but it's the perfect size for what they want. Only I have no idea what to charge.
For me personally, it is easier to decorate an 8" than a 6". I often make cakes a bit bigger than what was quoted if I know that the design will look better. It's not that big of a deal to go up a size if I will be happier with the finished product.
I just make sure the person knows that I went the extra mile for them at no charge. People really seem to like that!
First, you need Cake Boss ( the program not the TV show) for your pricing starting point, it will really help you decide where your base is and how much you are spending out of pocket ( ingredients, labor, disposable materials, overhead, driving to the store to get supplies). This is all factored in. $40 is a minimum for me, I won't turn my oven on for less!
You'll get there, this is a great place for advice, I didn't know where to start either until someone told me to compared my work to art, people are willing to pay for things they can't do themselves, be confident in your work and DO NOT feel bad.
Remember that everyone wants a deal, and people talk about your pricing. I am a teacher and did cakes for three women at school, I walked into the faculty room and caught them talking about what they paid, it wasn't bad but people will tell others prices just as much as they rave abotu your product!
Good Luck!
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