Place softened butter and granulated sugar in a large mixing bowl (or a stand mixer fitted with the paddle attachment). Cream until light and fluffy, about 1-2 minutes.

Add the egg, vanilla extract, salt, baking powder, and cocoa powder. Mix until just combined, then gradually mix in the all-purpose flour until the dough is smooth.

Lay a sheet of wax or parchment paper on a work surface. Place half of the cookie dough in the center and press to form a disk. Cover with another sheet of paper and roll to between 0.25 to 0.5 inch thickness. Repeat with the second half of the dough.

Chill the dough until firm, at least 30 minutes. This is crucial for cut-out cookies to hold their shape.

Preheat your oven to 350°F (175°C). Line cookie sheets with parchment paper or silicone baking mats.

Remove half of the chilled dough from the refrigerator. Use cookie cutters to cut desired shapes. Place the cut-out shapes 2 inches apart on the prepared cookie sheets. Chill the cut cookies for another 15 minutes.

Bake cookies for approximately 10-15 minutes, or until the edges are set and the cookies are no longer glossy (baking time will vary depending on thickness and size).

Reroll any leftover dough scraps and chill while cutting shapes from the second half of the dough. Continue until all cookie dough is used.

Once baked, transfer cookies to a wire rack to cool completely before frosting.

To make the frosting, beat softened butter and powdered sugar with a stand mixer until crumbly. Add salt and vanilla extract.

Add 3 tablespoons of milk and mix until smooth. Add more milk, 1 teaspoon at a time, until you achieve a desired piping consistency. If desired, mix in food coloring.

Frost cookies as desired. Add sprinkles while the frosting is wet, if using. Let the frosted cookies sit at room temperature to allow the frosting to set before stacking.