In large bowl, beat 1 cup sugar, the butter, milk, vanilla and egg with electric mixer on medium speed until well blended, scraping bowl occasionally. On low speed, beat in flour, baking powder and salt until well mixed, scraping bowl occasionally.
Divide dough in half. To one half of dough, stir or knead in red food color until desired pink color. Cover with plastic wrap; refrigerate at least 1 hour for easier handling.
Heat oven to 400°F. Work with 1/3 of white dough at a time; keep remaining dough refrigerated. On lightly floured work surface, roll out white dough with rolling pin to 1/8-inch thickness. Cut with floured 2 1/2-inch heart-shaped canapé or cookie cutter; place 1 inch apart on ungreased cookie sheets. Repeat with 1/3 of pink dough, keeping remaining pink dough refrigerated.
Using floured 1-inch heart-shaped canapé or cookie cutter, cut center from each pink and white cookie. Remove centers; replace each center of cookie with cutout of opposite colored dough. Sprinkle with sugar.
Bake 5 to 9 minutes or until edges are light golden brown. Cool 1 minute; remove from cookie sheets.