Step 1: Prepare the Cookies. Preheat your oven to 350°F (175°C). Line two baking sheets with parchment paper.
Step 2: In a large bowl, combine the yellow cake mix, melted butter, egg, and vanilla extract. Mix until a thick, uniform dough forms. It will be quite stiff.
Step 3: Roll the dough out thinly (about 1/8 inch thick) on a lightly floured surface or, for less mess, between two sheets of parchment paper. Use small cookie cutters (about 1.5 inches) to cut out various fun shapes. Carefully transfer the cut cookies to the prepared baking sheets. Reroll any scraps as needed until all dough is used.
Step 4: Bake for 8-10 minutes, or until the edges of the cookies are lightly golden and the centers are set. Let the cookies cool on the baking sheets for a few minutes before transferring them to a wire rack to cool completely. Ensure they are fully cooled before serving or storing.
Step 5: Make the Frosting. In a medium bowl, using an electric mixer, beat the softened unsalted butter and softened cream cheese together until the mixture is light, fluffy, and well combined, with no lumps.
Step 6: Gradually add the powdered sugar, one cup at a time, mixing on low speed until combined after each addition. Once all the sugar is incorporated, increase the speed to medium-high and beat until the frosting is smooth and creamy.
Step 7: Stir in the vanilla extract, almond extract (if you’re using it for that authentic flavor boost), and start with 2 tablespoons of milk or cream. Beat again until smooth. If the frosting seems too thick for dipping, add more milk or cream, 1 teaspoon at a time, until your desired dippable consistency is reached.
Step 8: Gently fold in the 1/4 cup of rainbow sprinkles. Be careful not to overmix, as this can cause the colors to bleed.
Step 9: Assemble and Serve. Once the cookies are completely cool, arrange them on a platter alongside the creamy funfetti frosting for dipping. Provide extra sprinkles for those who love an extra dose of color and fun. Enjoy your delicious Homemade Dunkaroos! Store leftover cookies and frosting in separate airtight containers.