In the bowl of a stand mixer fitted with the paddle attachment, beat butter and sugars at medium speed until fluffy, 3 to 4 minutes, stopping to scrape sides of bowl. Reduce mixer speed to medium-low. Add eggs, beating well. Beat in vanilla.

In a medium bowl, whisk together flour, baking soda, baking powder, and salt. With mixer on low speed, gradually add flour mixture to butter mixture alternately with milk, beginning and ending with flour mixture, beating just until combined after each addition. Gently stir in ¾ cup candy. Refrigerate until slightly firm, about 30 minutes.

Preheat oven to 350°F (180°C).

For bars: Line a 9-inch square baking pan with parchment paper, letting excess extend over sides of pan. Press dough into prepared pan. Top with sprinkles and remaining ¾ cup candy.

Bake until edges are golden brown and an instant-read thermometer inserted in center registers 200°F (93°C), about 30 minutes. Let cool in pan for 5 minutes. Using excess parchment as handles, remove from pan, and let cool completely on a wire rack. Cut into bars. Store in an airtight container for up to 3 days.

For cookies: Line baking sheets with parchment paper. Using a 1½-tablespoon spring-loaded scoop, scoop dough, and place 2 inches apart on prepared pans. Top with sprinkles and remaining ¾ cup candy.

Bake until golden brown and fragrant, 10 to 12 minutes. Let cool on pans for 5 to 10 minutes. Remove from pans, and let cool completely on wire racks. Store in an airtight container for up to 3 days.