Cream butter and powdered sugar together. Add vanilla extract and then add flour. Knead with your hands until you have a smooth sugar dough.
Roll out sugar dough between two pieces of plastic or parchment to about 1/4" thickness. Cut out 12 skull and crossbones with 2" or 3" cookie cutter and place cutouts on a parchment lined cookie sheet.
Use a large hole straw to punch out the eyes. Blow through the straw to remove cutout dough and add it back to the rest of the dough.
Use a corner of a star cookie cutter to press a nose onto each skull. Cover with plastic wrap and refrigerate skulls to firm up while you work on the black sugar dough.
To the remaining sugar dough, add black gel food color knead until food coloring is incorporated. Roll out black sugar dough to about 1/4" thickness. Use a 4-inch round cookie cutter and cut out circles and place on a parchment lined cookie sheet. Cut out a skull and crossbones from the center of each black circle, adding the black cutout skull back to your sugar dough to reuse until you've made 12 circles.
Remove white skulls from the refrigerator and check firmness. If they are firm enough to pick up, add them to the skull cutouts of your black circles. If they are still too soft, refrigerate until firm.
Use the large hole straw again to punch out small black dough eyes and blow through the end of the straw to add them to your skull eye sockets.
When the skull and crossbones have softened after sitting out for a bit, cut in details with a paring knife, cover with plastic wrap and refrigerate until ready to use.