In a large mixing bowl, cream together 1 cup of softened unsalted butter, 8 oz of softened cream cheese, and 1 cup of granulated sugar until light and fluffy, about 3-5 minutes. Add in 1 large egg and 1 teaspoon of vanilla extract (and optional coconut extract) until fully combined.

In a separate bowl, whisk together 3 cups of all-purpose flour and 1 teaspoon of baking powder until evenly mixed. Gradually incorporate into the creamed mixture until just combined.

Cover the dough with plastic wrap or transfer to an airtight container. Refrigerate overnight to firm up.

Preheat oven to 325°F (163°C). Roll out balls of dough into 1-inch, 3/4-inch, and 1/2-inch sizes. Arrange on ungreased baking sheets, 2 inches apart.

Bake 18-20 minutes until lightly golden around the edges. Let cookies cool completely before decorating.

Press miniature semisweet chocolate chips into larger cookies for eyes and place M&M's Minis on smaller cookies for buttons.

Mix 2 cups of confectioners' sugar with a splash of milk and a touch of coconut extract until smooth. Adjust milk for desired consistency; use for piping scarves on snowmen.