I wouldn't bother with having them ice a cookie, I think they are too young. I would give them a frosted cookie and edible markers. That's what I have done for kids parties. Use cheap markers like Wilton.
Excellent idea, should have been mine
I don't know about the US and Canada, but if you want real cheap markers, go looking for normal ones for kids. Here in Germany the non-toxic kind (for children so small that they will surely suck on markers) are filled with food colors anyway. 20 markers are around 3-5 USD, Wilton cannot beat that...
That's an amazing price. I have leftover Wilton markers from when I first did decorating and didn't know about americolor. Also, if you go to michaels or joanns with 50% off coupons the pens can get cheap.