Heat oven to 350°F. On lightly floured surface, roll dough to about 1/4-inch thickness. Cut with 4 1/2-inch lamb-shaped cookie cutter. Reroll dough once and cut additional cookies. On ungreased cookie sheet, place cutouts 2 inches apart. Refrigerate 15 minutes.
Bake 8 to 10 minutes or until barely golden brown. Cool 2 minutes; remove from cookie sheets to cooling racks. Cool completely, about 15 minutes.
Frost cookies with vanilla frosting. Attach marshmallow bits to cover body of each cookie. Attach 1 chocolate chip, point side up, for eye. Pipe black icing for nose and hooves. Pipe blue icing bow around neck. Let stand until set.