Preheat your oven to 350°F (175°C) to ensure it’s hot and ready for your cookie cups.
In a large mixing bowl, combine the 1 cup of softened unsalted butter and 1 cup of granulated sugar. Use your electric mixer to beat them together until the mixture is light and fluffy, about 2-3 minutes.
Add the large egg and 2 teaspoons of vanilla extract to the creamed mixture. Mix well until everything is combined.
In a separate bowl, whisk together the 1 and 1/2 cups of all-purpose flour, 1 teaspoon of baking soda, 1 teaspoon of baking powder, and 1/2 teaspoon of salt.
Gradually add the dry ingredients to the wet mixture, mixing until just combined. Be careful not to overmix!
Gently fold in the 1/2 cup of funfetti sprinkles, ensuring they are evenly distributed throughout the dough.
Using a cookie scoop, portion the dough into a greased muffin tin, filling each cup about 2/3 full.
Bake in the preheated oven for 10-12 minutes, or until the edges are lightly golden. The centers may look a little underbaked, but they will firm up as they cool.
Let the cookie cups cool in the muffin tin for about 5 minutes before transferring them to a wire rack to cool completely. Meanwhile, make the frosting.
In a large mixing bowl, beat together 1 cup of softened unsalted butter and 1 teaspoon of vanilla extract. Gradually add 3 to 3.5 cups of powdered sugar, mixing until smooth. If the frosting is too thick, add 1 tablespoon of heavy whipping cream to reach your desired consistency.
Once the cookie cups are completely cool, generously pipe or spread the frosting on top of each cookie cup. Top with additional funfetti sprinkles for that extra festive touch!