Bake and cool cookies. Place cookies on cooling grid positioned over cookie sheet. Thin down yellow royal icing with water and pour over cookies; let dry.
Tint portions of fondant red, yellow, rose and black. Roll out red fondant 1 in. wider than point; mold over one point of star and cut excess into triangle. With small portions of white fondant, roll into ball and attach to point of hat. Roll 1/4 in. strip for brim; attach with water. With end of paintbrush, make imprint texture on brim.
Roll fondant and cut eyes and cheeks with small opening end of tip 12 and nose with small opening of tip 9 and tip 6 for pupils. Cut mouth 3/4 in. wide and 3/8 in. deep. Cut tongue from tip 9 small opening and indent; position in mouth with damp brush.
*Note: Combine Lemon Yellow and Golden Yellow for yellow shown.