Preheat oven to 350F and prepare baking sheet by using a baking mat or parchment paper.

In a large bowl, mix butter, sugar, and mix until well combined. Add flour, baking powder, vanilla extract, milk, and mix until well combined.

Place parchment paper on table, place cookie dough on top, followed by another sheet of parchment paper and roll out until the desired thickness. Cut cookies into shapes and place on pan.

Bake for 9-11 minutes or until golden brown.

In another baking sheet, place coconut, spread out and bake for 10 minutes.

In a microwave safe bowl, add caramel and milk and warm for 15-20 seconds. Add coconut into the caramel bowl and mix. Place on top of the cookie.