I charge per cupcake, my basic frosted and filled cupcake price is $2, then depending on how they want it decorated I add on extra for labour/ingredients if neccesary.
If it is quite a large order, I will give a discount, but they have to be ordering over 250 regular sized to get that. Simply because for that amount, I can order the dairy at bulk and save money myself.
I was doing per dozen when I first started, simply because I have a minimum order of 1 dozen, but I found customers seemed to like it better when I could show them a price break down per cupcake.