1Heat oven to 400°F. Stir Bisquick mix, milk, 2 tablespoons sugar and the egg in medium bowl until soft dough forms. Place dough on surface generously dusted with Bisquick mix; gently roll in Bisquick mix to coat. Shape into a ball; knead 5 times.
2Roll or pat dough into 6 1/2-inch square, 1/2 inch thick. Cut dough into 12 strips. Shape 6 strips into circles to make O shapes; pinch ends to secure. Cut remaining 6 strips crosswise in half; crisscross pairs of strips to make X shapes. (Or use X- and O-shaped cookie cutters dipped in Bisquick mix.) Place hugs and kisses on ungreased cookie sheet.
3Bake 8 to 10 minutes or until light brown. Immediately brush with melted butter and sprinkle with granulated sugar. Serve warm.