Debate: should a home baking side hustle charge per hour or per batch

I sell cakes and cookies out of my apartment kitchen in Portland and charge $40 flat per batch, which works out to maybe $12 an hour once you add shopping and cleanup. My neighbor does the same thing but charges $25 an hour plus ingredients, and she swears it made her stop taking tiny orders that eat her whole Saturday. I get it, but hourly feels weird to quote to a customer who just wants 2 dozen cookies for a baby shower. Which way do you all price your home food orders, and did switching actually change your profit or just make clients haggle more?

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