I'm a hobby caker. I enjoy doing it and look for opportunities to cake when occasions arise.

I plan to give a cake as a wedding gift to a relative. She's been quoted $1200 for the cake at a professional bakery. I can do the same thing using supplies costing about $300. Let's say for argument's sake, that I can bake and decorate to the same standard as the bakery.

Am I giving a $300 gift or a $1200 gift?

I voted for te $1200. Your supplies may only cost $300, but your time is worth a lot too. THAT'S the big value in a gift like this.

Neither. In my opinion the monetary value of the gift is your total cost for the gift, which includes labor but excludes the profit margin. So if you estimate your time to be worth $20/hour and it takes 10 hours to make the cake, the monetary value is roughly $500 including supplies.

If you saved them $1200 and gave them the same cake, then your gift is valued at $1200. Resale vaule of the cake would be $1200 then that is the valu of the cake. Just my opinon.

It is a gift valued at 1200 because that is how much it was going to cost them.

You aren't trying to show anyone how much cheaper you can do it right? Like, you're not "sticking it" to the big guys (the professional bakery"? Right? Just wondering, not trying to be rude.

If you gave a gift at a wedding for a blender and you got it 1/2 price than is your gift less of a gift? The gift would retail the same value no matter what you paid.
So in my thought a gift is considered retail value.

The "value" of your gift is what it would have cost them to buy it. The "cost" of your gift is the value of the ingredients plus the value of the time you put into it. As ljslght has pointed out the "value" of the blender is what it would cost them to buy it, the "cost" of the blender is whatever you actually paid for it.

I agree with the others. You saved her $1,200, so your gift is worth $1,200.

Agreed, but I think the basic assumptions in this thread are flawed. It's doubtful that OP could produce a $1200 cake for anywhere close to $300 unless they value their time at $0 or the Australian market somehow supports a 400% markup on custom cakes.

Also, "value" is subjective and is judged by the recipient of the gift, not the sender or any other business that could produce an equivalent gift. The recipient may well value the gift at $1200, but the sender has no control over that valuation, and I can't think of a socially acceptable reason to even discuss it with the recipient.

Well, I do value my time at $0, because it's time spent on a hobby I enjoy, not time away from a business that's costing me money. I do see the point about value and cost being different things.

The 400% markup comes from the design being quite intricate and time consuming, but being that I'm not charging for time, the $300 of supplies will cover it, I believe, give or take.

I'm not planning on discussing it with the recipient!

Regardless, your cakes are lovely and I'm sure you'll have no trouble replicating the cake. It will be a wonderful gift no matter the exact dollar amount. How lucky is this couple to have you as a friend?

This does bring up a good point like when you donate a cake or something that takes your time and talent how much would you put the "value" of said donation to be? what it would cost someone to buy or how much it cost you including time to make? Just wondering. I made a cake for my daughters school for a silent auction iloved doing it and it didn't take too long to decorate but I didn't think the starting bid the school put on it was high enough. I got some business from it but don't want people to think those are my prices.

I just made a wedding cake for my niece as a gift. I knew it would be a gift and I wouldn't be reimbursed, so I didn't pay super close attention to how much I spent on it. Lots of shopping trips and online orders for supplies...Ball park, I probably spent around $300. The cake served around 220 people.

I never mentioned the value or discussed it with my niece. But my daughter mentioned to me that my niece told her I was saving her at least $900. So I was happy she did some research and she had a clue what she would have been spending if I didn't make it for her. She also knew I loved every minute of it and was very honored to be asked.

I Vote $1200.
I'm a couponer, Not a Extreme Couponer but a Couponer.
So this is the way I see things. Like on Extreme Couponing the Couponers that get insurance on their stock piles don't get a policy on the price they paid to get all of their stock pile but on the cost that it would cost to replace the items if they were horribly destroyed.
Plus I'm making My Daughter's Wedding cake. Her and His Family don't see me saving them the $$$$ that I paid for the supplies for the cake but what it would have cost to purchase the cake if they had to order it from a bakery. Also they are getting hopefully a better cake than what they would have gotten if they ordered for the small amount of people that will be attending the wedding.

If you replicated that cake, would YOU sell it for $1200? If yes, then its worth $1200.

I know some people wouldnt sell a cake for that much because their skill would dictate a lower price.

Its like if I offered to do wedding photos for a friend, where they were going to spend (hypothetically, cos I dont know dollar prices) $2000, but my equivelent package is $1000, then they're getting a gift for $1000 as that is what I would charge.

It's worth how much YOU would sell it for, not how much a different bakery making the same design would sell it for. It's not the same cake even if it looks the same.

As far as valuing donations to charity events, the IRS doesn't allow you to deduct the cost of your labor, so it's cost of materials only, as far as I know. That doesn't mean it isn't "worth" more than that if you sold it, but charity auctions are generally where people get things for lower than they usually would cost from what I've seen. Depends on how much alcohol is involved before the bidding starts!