Step 1: Beat shortening in a mixing bowl with an electric mixer on medium to high speed for 30 seconds.
Step 2: Add sugar, baking powder, and salt; beat until combined, scraping sides of bowl occasionally.
Step 3: Beat in egg, milk, and vanilla until combined.
Step 4: Beat in as much of the flour as you can with the mixer. Stir in remaining flour with a wooden spoon.
Step 5: Divide dough into thirds. If necessary, cover and chill about 3 hours or until dough is easy to handle.
Step 6: Roll one-third of the dough at a time on a lightly floured surface to 1/4-inch thickness.
Step 7: Cut with 3-1/4- and 2-1/4-inch scalloped cookie cutters, making an equal number of each.
Step 8: Place cutouts on an ungreased cookie sheet.
Step 9: Cut the center from each 3-1/4-inch cutout using a 1-1/4-inch scalloped cutter.
Step 10: Cut the center from each 2-1/4-inch cutout using a 1-inch scalloped cutter.
Step 11: Sprinkle cutouts with colored sugar, granulated sugar, or a combination of sugars.
Step 12: Bake in a 375 degree F oven for 6 to 8 minutes or until edges are firm and bottoms are very lightly browned
Step 13: Transfer to wire racks and cool.
Step 14: To assemble, place a small wreath on top of each large wreath; tie wreaths together with ribbon. Tie ribbon into a loop large enough to hang on a tree.
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