Dia de los Muertos (Day of the Dead) is celebrated on November 1 and 2 in Mexico and many parts of the United Statesl. Sugar skulls are part of the traditional altar, or ofrenda, and are very simple to make. You need only sugar (both granulated and powdered), meringue powder, skull-shaped molds and some icing coloring. You'll also need a couple of days to make them, as there is drying time involved.
I want to credit this website, which not only sells all variety of skull molds, but also has detailed instructions on making and decorating sugar skulls. All recipes are theirs.
Step 1: Ingredients for the skulls
This will make 10 large skulls:
10 lbs. granulated sugar
1/2 c. meringue powder
7 Tbs. water
Add the meringue powder to the sugar and blend thoroughly. Sprinkle the water over the top of this, and blend until it has the texture of soft beach sand.
Step 2: Molding
Pack the molds firmly so there are no air spaces which could cause the skull to collapse. A butter knife helps tamp the sugar mixture into corners.
When the mold is full, use the same knife to level the surface, place a square of cardboard over the top, flip and gently remove the mold.
Step 3: Drying and assembling
These particular large molds had two parts: a face and an occiput. Let all the parts dry overnight, then carefully nestle them in your palm and scoop out the center on each side to facilitate drying. Place the pieces hollowed side up and let dry overnight again.