In a mixing bowl, combine softened butter, vanilla extract, egg, and cream cheese. Beat on medium speed until fluffy and well-blended (about 2-3 minutes).

Gradually add yellow cake mix to the mixture, stirring gently until just combined to form a thick, sticky dough (about 1-2 minutes).

Cover the dough with plastic wrap and refrigerate for 30 to 60 minutes until manageable.

Preheat oven to 350°F (175°C). Shape chilled dough into 1-inch balls, rolling in sprinkles if desired, then coat in powdered sugar.

Place rolled cookie balls on a lined baking sheet, spaced 2 inches apart. Bake for 10-12 minutes until edges are lightly browned and centers remain puffy.

Let cookies cool on the baking sheet for about 5 minutes before transferring to a wire rack to cool completely.