Cut cookie using largest round cutter from set; bake and cool.
Use medium round cutter to cut red fondant circle; attach to cookie with damp brush. Use medium round cutter to cut green fondant circle, then use medium star Cut-Out to out center.
Attach green circle on top of red circle with damp brush.
For scallops around ornament, use large opening of tip 10 to cut red fondant circles; cut circles in half and attach to cookie with damp brush. Roll tiny red fondant balls and attach to ornament with damp brush.
Attach red hollow-center hard candy to top of ornament with small ball of red fondant. Roll a 1/2 in. ball of red fondant and attach to candy with damp brush.