Hi kab firstly I spent £50 on a cake for my DD 14 years ago! That's what you pay for a special cake your child will love and its worth every penny,don't feel guilty about that just because others think its a waste of money.
As regards to your sister,as others have said asking £25 for half of the cake cost won't go down well. As reasonable as it is really....half the cost of a lovely cake for a JOINT party.
But I wouldn't, I would however say I really didn't expect doing the joint party thing and the extra kids,adults ect. So you'll need to bring sandwiches,crisps,buns,fruit skewers and drinks.
Say ill be providing other food too like quiches and salad for the adults.
I got stung last year with the suggestion of a joint party....I've never been so embarrassed or angry.The other party didn't bring anything, no food drinks or even a card for my DD.
They drank 3 bottles of wine that I'd bought so all the adults could have a little toast after we had all eaten, when one guest said "top me up Auntie" I said no sorry it's all gone. My face was burning I was so annoyed it was a child's party not a piss up....he then announced he was going to the shop for more alcohol....great I thought until he returned with one can of Fosters for himself.
His adult friends ate all the food and just generally took the Piss allowing kids to play football in the house and bring scooters in and stuff.
All totally not my nephews fault but its made my very wary of doing anyone a favour again. I'm not saying your DSis is like this but sounds like your brother in law is.
Just be very clear they need to contribute or it's not really joint is it?
Is them gate crashing yours.