Combine the flour, baking powder and baking soda and set aside.
In a large bowl, cream together the 1 cup of butter and sugar. Beat in the eggs, one at a time, then stir in the ricotta cheese and vanilla.
Stir flour mixture into ricotta mixture.
Drop by rounded spoonfuls onto the prepared cookie sheet. Bake for 8 to 10 minutes in the preheated oven. Allow cookies to cool on baking sheet for 5 minutes before removing to a wire rack to cool completely.
To make the frosting warm the milk, 1/2 teaspoon of butter and shortening, in a small saucepan. Cook over medium heat, stirring occasionally until solids are melted. Remove from heat and gradually stir in the confectioners' sugar and lemon extract. Dip each cookie into the icing then dip in colored sugar or sprinkles.