Preheat oven to 350°. In a large bowl, cream butter and sugar until light and fluffy. Beat in egg and vanilla. In another bowl, whisk flour, baking powder and salt; add to creamed mixture alternately with milk, beating well after each addition. Stir in sprinkles.
Spoon a scant 3 tablespoons batter into each cone; place cones in muffin cups. Bake 25-30 minutes or until a toothpick inserted near the center of the cake comes out clean. Cool completely on wire racks.
For frosting, beat butter until fluffy. Beat in confectioners' sugar, vanilla, food coloring if desired and enough milk to reach piping consistency. Pipe frosting over cupcakes; if desired, spoon chocolate topping over frosting. Decorate as desired.