AI'm glad you got the order. If you do quality work then people will pay for it and return. As Kara stated above, not everyone can afford a custom cake, so don't feel bad you are running a business.

Asking someone about their budget in the beginning can help save you both some time, some customers haven't even had it cross their mind and others can be wary of that question thinking you'll try to start them at that price point. It's simply a way to start you both off in the right direction. Someone on here once suggested the 'Good', 'Better', 'Best' approach (I am paraphrasing) but they would make three sketches around their price range and let them chose from there. It's especially helpful when someone shows you a picture of a $3,000 cake when they only have a budget of $1,500, since most people don't realize all the work that goes into a custom cake. I think the original poster of that advice was explaining it as a business strategy, typically the customer would want to spend the extra money on the Better or Best cake. Regardless, there's obviously a way to work within someone's budget without compromising your costs (which you know).

Basically I wanted to tell you more often then not (especially in the beginning) people will undercharge rather then overcharge, for their time so keep that in mind.

My base prices cover simple things like some writing or simple piping, but the overlay and quilting in the picture above I would charge extra for and I only offer small 4" cakes with a first birthday. That's just me though :)

Your offer isn't low - it's just right for what she's expecting you to do..  One thing about the cake business is that you'll find a ton of "window shoppers" - just roll with it!  You're better off to have 10 properly paying orders that you can turn a profit from than 40 who short change you below your costs. 

As for serving chart - I made my own, while Earlene's chart is wonderful, and Wilton is great if you hate cake or are eating their fondant, I found neither fit who my customers were, so I made one that worked for me and haven't looked back.  I've never had an event without enough cake since.