In a large mixing bowl, cream together the softened butter and granulated sugar until light and fluffy. Add the egg and vanilla extract, mixing until well combined. In a separate bowl, whisk together the flour, baking powder, and salt. Gradually add the dry ingredients to the wet ingredients, mixing until a dough forms. Divide the dough in half, wrap each in plastic wrap, and refrigerate for at least 1 hour.

Preheat the oven to 350°F. Roll out the chilled dough on a floured surface to about 1/4 inch thickness. Use cookie cutters to cut out desired shapes and place them on the prepared baking sheet.

Bake in the preheated oven for 8-10 minutes or until the edges are lightly golden. Remove from the oven and allow cookies to cool on the baking sheet for 5 minutes before transferring to a wire rack to cool completely.

In a medium bowl, beat the softened butter until creamy. Gradually add the powdered sugar, vanilla extract, and milk. Beat until smooth and creamy. If desired, add a few drops of food coloring and mix until well combined.

Once the cookies are completely cool, spread the frosting over each cookie using a small spatula or butter knife. Add sprinkles or other decorations as desired.

Let the frosting set for about 15 minutes before serving. Enjoy with your favorite beverage.

Store the frosted cookies in an airtight container at room temperature for up to 1 week. For longer storage, keep them in the refrigerator.