In a large saucepan, combine marshmallows and butter. Cook and stir over medium-low heat until melted. Remove from the heat; stir in pudding mix until blended. Stir in cereal. Press into a greased 15x10x1-in. pan. Refrigerate for 30 minutes.
Using a 3-in. bone-shaped cookie cutter, cut out shapes. In a shallow microwave-safe dish, heat the butterscotch and vanilla chips with shortening at 50% power until melted; stir until smooth.
Dip bottoms of bones into melted butterscotch mixture; place on foil. Place some mixture in a heavy-duty resealable plastic bag if desired; cut a small hole in a corner of bag and pipe designs over bones. Let stand until set. Gently remove from foil.