Beat sugar and coconut oil until smooth. Add in the applesauce, egg, and vanilla and beat until combined.
Sift in the dry ingredients and mix on low until the dough comes together.
Gather the dough into a ball and refrigerate dough for at least 30 minutes, preferably an hour.
When ready bake, Preheat oven to 350 F. Roll the dough out on a lightly floured surface to about ¼-1/3 inch thick. Use a round cookie cutter about 2 inches in diameter to cut out cookies. Place cut cookies on a parchment lined baking sheet 2 inches apart. Gather dough scraps into a ball and place back into the fridge until ready to bake another tray. Bake for 10-12 minutes on the middle rack, until cookies are just set on the edges and just beginning to golden. Remove and let cool on baking sheet for 10 minutes before transferring to a wire rack.
Repeat the above two steps with remaining dough.
While cookies are cooling, you can make the icing. Combine all ingredients in a food processor or blender until smooth. I like to let this sit in the fridge for a couple of hours after so it’s not too runny before icing the cookies. You can feel free to add food dye to the icing, as well.
Ice, decorate, and enjoy!
Keep these cookies stored in the fridge. This keeps them soft and keeps the icing from going bad. They can be stored for up to 5 days.