Combine butter, powdered sugar, and flour in a large bowl using an electric mixer (I use my stand mixer with a paddle attachment). Note: The dough may appear crumbly, but keep mixing and it will turn into a soft dough. Trust me! You can also form the dough with your hands.
Roll dough out on a lightly floured surface using a rolling pin until it's 1/4" thick.
Cut out shapes using small animal cookie cutters and place them on an ungreased cookie sheet lined with parchment paper.
Bake at 325 degrees for 13-14 minutes*. Let the cookies cool on the baking sheet. Cool completely.*The edges and bottoms of the cookies should be a light golden brown. I cook these cookies a little longer than normal so that they are crisp once cooled. Perfect for dipping and has the same texture as circus animal cookies.
While the cookies cool, melt one color of melting chocolate according to the package instructions. I find that it's easiest to dip one color at a time. This way you don't have to worry about the other color cooling and hardening while you are dipping the other cookies.
Dip cookies into the melted chocolate. Flip over with a fork and cover the cookie completely. Lift the cookie out of the melted chocolate with a fork, tapping the fork against the side of the bowl to allow excess chocolate to drip off.
Sprinkle with nonpareil sprinkles before the chocolate hardens.
Repeat with the other color until all cookies have been dipped and covered.
Allow cookies to set up.
Video
Notes
Once hardened, store cookies in an airtight container for up to 5 days.