Add the frosting ingredients to a standing mixer.
Mix well until the frosting is creamy. (Start the speed low then slowly increase the speed.)
When the cake is cool, add a layer to a plate and frost the top, add the next layer and frost the top. Once all layers are frosted, frost the top and sides and use a frosting scraper to smooth.
Divide the remaining frosting into several bowls.
Add food coloring to each and stir.
Add frosting from each bowl to the bag, careful not to mix them.
Use the frosting bag to swirl circles on the top of the cake, going down the back. This is the "mane" section so include a little on the forehead area for the forelock.
Take two Peeps and cut them in half. These are the Unicorn's ears.
Grab the rest of the Peeps and add to a bowl. Melt the Peeps at 20 second intervals in the microwave, stirring between each interval.
When the Peeps are melted, add the powdered sugar gradually, a little at a time to mix it in. As the mixture thickens, it becomes like fondant. When the mixture is stiffer, shape it into a Unicorn horn.
Use food coloring or an edible marker to draw the eyes and mouth.