Set your oven to 350°F and prepare two baking sheets by lining them with parchment paper.
Using an electric mixer, blend the cream cheese, butter, egg, and vanilla until the mixture is silky smooth.
Add the yellow cake mix and mix until you get a dense dough.
Carefully fold in the holiday sprinkles, ensuring not to overwork the dough to keep the colors vibrant.
Refrigerate the dough for a minimum of 30 minutes to firm it up for easier handling.
Form the chilled dough into 1 1/2-inch balls and roll each ball thoroughly in powdered sugar.
Arrange the dough balls on the baking sheets with a 2-inch gap between each.
Bake for 10 to 12 minutes, watching for edges to firm while centers remain soft.
Allow the cookies to rest on the baking sheet briefly before transferring them to a cooling rack to set completely.
