In a large bowl, combine 1 cup softened butter, 1 cup sugar, and 1 egg.

Beat the mixture at medium speed until creamy and smooth.

Add 2 1/2 cups flour, 2 tablespoons orange juice, 1 tablespoon vanilla, and 1 teaspoon baking powder to the bowl.

Beat at low speed until all ingredients are well mixed and a dough forms.

Divide the dough into three equal portions.

Wrap each portion of dough in plastic food wrap.

Refrigerate the wrapped dough for at least 2 hours, or until firm.

Preheat the oven to 400°F (200°C).

On a lightly floured surface, roll out one portion of the refrigerated dough to a thickness of 1/8 inch.

Use 2-inch cookie cutters to cut out shapes from the rolled dough.

Place the cut-out cookies 1 inch apart on ungreased cookie sheets.

Bake in the preheated oven for 6-10 minutes, or until the edges are lightly browned.

Let the cookies cool on the cookie sheet for 1 minute before transferring them to a cooling rack.

Allow the cookies to cool completely on the rack.

In a small bowl, combine 3 cups powdered sugar, 1/3 cup softened butter, and 1 teaspoon vanilla.

Beat the ingredients at low speed, adding milk gradually until the frosting reaches your desired consistency.

If desired, tint the frosting with food coloring.

Frost and decorate the cooled cookies as you like, adding sprinkles or other decorations.