Preheat the oven to 350°F and prepare baking sheets by lining them with parchment paper.
In a large mixing bowl, beat together the softened butter, cream cheese, and granulated sugar using a hand mixer until the mixture is smooth and well-combined.
Incorporate the egg and vanilla extract into the creamed mixture, mixing until fully blended.
Gradually add the flour, baking powder, and ½ cup of the confectioners' sugar with the mixer set to low speed, ensuring all ingredients are well integrated.
Carefully fold in the Christmas sprinkles until just mixed throughout the dough.
Using a cookie scoop that holds approximately 2 tablespoons, portion the dough and roll each scoop in the remaining ½ cup of confectioners' sugar.
Place about 6 dough balls per prepared baking sheet, spacing them evenly, and gently flatten each with the bottom of a glass or your hand.
Bake for 8 to 11 minutes, or until the tops appear set and no longer glossy.
Allow cookies to rest on the baking sheet for 5 minutes before transferring them to a wire rack to cool completely.