The Food network has this great cupcake costume 'recipe' with spray painted foam hair curlers as sprinkles and batting-stuffed fleece for puffy icings. Cheap, easy and uber-cute.
I've seen some sweet cupcake tights and leggings, so I could see just putting a jean skirt under it and adding a whole new cupcake-inspired touch to make it a bit more wearable and comfy. Love it! See some of their other food inspired costumes here.