Preheat the oven to 375 degrees and line a baking sheet with parchment paper.
In a large mixing bowl, combine the sugar cookie mix, butter, and egg, and mix well.
If dough is dry, add a teaspoon of water at a time until no longer dry. If dough is too sticky, add a few tablespoons of flour until no longer sticky.
Roll the dough out onto a floured surface with a floured rolling pin.
Cut out the rainbow shapes with the rainbow cookie cutter and transfer them to the baking pan.
Bake for 10-12 minutes or until Golden brown in color.
Remove from oven and let cool.
Fill a decorating bag with frosting and cut a 1/3” tip off the end.
Frost the rainbow part of the cookie, leaving the clouds for now.
Start placing the miniature M&M’s onto the rainbow along the edges like pictured, and then place the M&M’s in a rainbow shape, following the color pattern.
Dab frosting onto the clouds to make them look fluffy.
Top the clouds off with the white sprinkles and enjoy!