Wow, I have NEVER seen cake for $1.50 a slice in a restaurant. They're all $3.50 or more around per slice here in New England and greater Boston area. I think she maybe has to raise that rate a bit for you to charge enough to even cover your costs and for her to make some profit. I don't think I'd do a full two layer 9" cake for less than $15, seriously. If it's fancy decorating, you're talking $25 for a cake.
I'd say do basic chocolate cake - the doctored recipe maybe, or maybe just regular cake mix (supermoist) with buttercream frosting with butter.
If she wants a chocolate decadence cake, which costs far more to make, you will have to charge her more for it and she will have to make those slices more expensive, too.
I'm not sure if you're going to get your money or time's worth doing this long term, are you? Can you ask her if you can put some flyers or cards in the lobby or on the register, or a note in the menu about the cake supplier with contact information.
Best of luck!
~AngelWendy
