I currently use hdiutil to create my DMGs.
hdiutil
The command I use is hdiutil create -size xxxg myImage.dmg -fs HFS+. I'm always left fidgeting around with the size until I get it close enough.
hdiutil create -size xxxg myImage.dmg -fs HFS+.
Is there a better method that either shrinks the DMG to size or creates it size?
Yes:
hdiutil create myImage.dmg -srcfolder SourceDir
This will automatically size the image to fit.