Preheat the oven to 350 degrees Fahrenheit.
Line cookie sheets with nonstick baking liners or lightly spray with nonstick baking spray.
In the bowl of an electric mixer, add the cake mix, melted butter, vanilla, and egg. Mix until incorporated.
Scoop or roll the dough into 1 1/2" balls and place them at least 2" apart on the prepared cookie sheets. Press the dough balls down with the palm of your hand to flatten.
Bake for 8 minutes.
Allow the cookies to cool on the cookie sheets for a few minutes before removing them to a cooling rack to cool completely.
Once the cookies are completely cool, prepare the frosting by creaming together the softened butter, softened cream cheese, vanilla extract and powdered sugar in the bowl of an electric mixer. Whip it until it's nice and creamy and lightens in color, scraping down the sides of the bowl in between.
Frost cooled cookies and sprinkle with red sugar, if desired.