Layout 1

Layout 2

I'd take #2. I'd rather have more floor space in the kitchen, because (1) higher probability of multiple people using it at the same time and (2) you spend more time in it.

Said another way, the bathroom is reasonably sized for your house and the kitchen is undersized. Thus I'd maximize the size of the kitchen.

Personally, I wouldn't want the W/D in the kitchen so I'd look for a way to make it work elsewhere, but not where it would take sq from the kitchen.
Is that a doorway at the end of the hall leading to the bathroom? Is the balcony already there? If not, what size will it be and will it be worth giving up room in the kitchen?

I agree with weedy acres, even though all things being equal I'd also prefer to not have the W/D in the kitchen (can you enclose it in a louvered-door cabinet? If so, I'd definitely vote for no. )2. The bathroom only needs to be "big enough". The kitchen is what you see and need room to maneuver. You'll appreciate the extra floor space in the kitchen the first time you have anyone over.