Prepare and bake cake mix according to package directions for cupcakes, filling paper-lined muffin cups two-thirds full. Cool in pans 10 minutes before removing to wire racks; cool completely.
Tint 2/3 cup frosting red with food coloring. Place 3 tablespoons white frosting in a food-safe plastic bag; cut a 1/4-in. hole in one corner and reserve for piping.
Use remaining white frosting to cover two-thirds of each cupcake. For hats, cover remaining third of each cupcake with red frosting. Pipe fur trim with white frosting; add marshmallows for pompoms. Decorate with M&M's, Red Hots and jimmies for faces; add coconut for beards.