1In large bowl, beat butter, brown sugar and vanilla with electric mixer on medium speed until creamy. Stir in flour, oats and baking powder. Gather dough into ball. Wrap in plastic wrap; refrigerate 30 minutes.
2Heat oven to 350°F. On well-floured surface, roll dough 1/4 inch thick. Cut with 3- to 3 1/2-inch heart-shaped cookie cutter. On ungreased cookie sheet, place cutouts 2 inches apart.
3Bake 8 to 10 minutes or until edges are light golden brown. Cool 1 minute; remove from cookie sheet to cooling rack. Cool completely.
4Turn cookies so pointed ends are up. Using desired tip, pipe frosting on upper 1/3 of cookie. Place 1 marshmallow half at tip of each cookie for hat; sprinkle with red sugar. Using small dots of frosting, attach 2 blue candies on each cookie for eyes. Pipe small frosting mustache below eyes; place red candy in center for mouth. Pipe frosting on lower 1/3 of each cookie for beard. Store in single layer, loosely covered.