In advance: Make cookie heads. Cut 7 circle cookies using smallest round cutter from set; bake and cool. Place on cooling grid and cover with thinned royal icing; let dry. Position cookies on waxed paper and pipe tip 1 dot eyes and string mouths; tip 2 dot noses and cheeks. Add tip 3 zigzag or outline hair, beards and mustaches. Pipe tip 3 outline and pipe in crown, then overpipe. Pipe tip 3 spiral turban with outline and pipe-in jewel. Let all cookies dry. Attach lollipop sticks to backs with royal icing; let dry.
Also in advance: Make fondant pieces. For halo and star, tint 1 in. ball of fondant yellow, roll out and cut with smallest round and smallest star cutters. For Joseph's staff, tint 2 in. ball of fondant brown, roll into 7 in. log and curl end. For wings, roll out white fondant and cut using heart cutter; cut heart vertically in half. Let all pieces dry several days on cornstarch-dusted surface. Using royal icing, pipe tip 352 pull-out feathers on wings. Attach lollipop stick to back of star with royal icing.
Make 2 resting
lambs (the held lamb will be made directly on cake). Bake and cool 7 Mini Wonder Mold cakes and 1 Petite Loaf cake. Trim loaf horizontally on an angle to make slanted manger; ice smooth in buttercream. For Baby, pipe tip 5 ball head and body; add tip 1 facial features. Cover body with tip 47 band wrap; add tip 2 pull-out straw. Ice mini cakes smooth in buttercream; use spatula edge to form folds in robes for angel and Mary. Pipe tip 12 pull-out arms (except for angel). Pipe tip 2 dot, zigzag, swirl and pull-out fur trim on robes; add tip 2 outline cuffs for Mary. Insert cookie heads into cakes. Make and position fondant sash and headpieces. Pipe tip 3 outline headbands; add tip 3 pipe-in and dot button to red headpiece. Position Joseph's staff. Decorate held
lamb on cake. Outline and pipe in tip 2 gifts. Add tip 2 bead hands and fingers.
Trim dowel rods to 3 in. and insert into angel cake for arms; ice smooth. Fill dowel rod with icing and insert star on stick. Pipe tip 2 bead hands and fingers; attach wings to cake and halo to head with icing. Position figures and lambs on foil-wrapped 13 x 19 in. board; sprinkle board with crushed shredded wheat.