People seem to be able to get perfect circles and other shapes out of felt, but I haven't mastered it yet. My cupcakes aren't perfect, but the kids love making their own cupcakes. They get to choose a cupcake, frosting, wrapper and sprinkles. It's mix and match so the kids can make it their own!
You can find the template here: http://alphamom.com/family-fun/crafts/build-a-felt-cupcake/
