White Velvet Cutouts

"We make and decorate these cutouts for different holidays and give lots of them as gifts. Last year, we baked a batch a week before Christmas to be sure we'd have plenty to give and plenty for ourselves, too. These rich cookies melt in your mouth. —Kim Hinkle, Wauseon, Ohio..."

INGREDIENTS
2 cups butter, softened
1 package (8 ounces) cream cheese, softened
2 cups sugar
2 large egg yolks
1 teaspoon vanilla extract
4-1/2 cups all-purpose flour
FROSTING:
3 tablespoons butter, softened
1 tablespoon shortening
1/2 teaspoon vanilla extract
3-1/2 cups confectioners' sugar
4 to 5 tablespoons 2% milk
Food coloring, optional
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