Preheat the oven to 350 degrees. Lightly grease a 9x13 inch pan or line with parchment paper so that there's an overhang around the edges.
In a large bowl, beat together the butter, cream cheese and granulated sugar until creamed. You should no longer see lumps of butter or cream cheese.
Beat in the egg, egg yolk and peppermint extract.
Sift the flour, baking powder and salt into the butter mixture. Starting with the mixer on a low speed, beat the ingredients together until combined. Stop mixing as soon as combined.
Spoon the dough into the prepared pan and spread/press into an even layer.
Bake in the preheated oven for about 22-25 minutes, or until the top looks set and the edges are just starting to turn golden.
In a large bowl, beat the butter until smooth.
Add in 2 cups powdered sugar, 1/2 teaspoon peppermint extract and the salt. Starting with the mixer on a low speed beat together until incorporated. If the powdered sugar is lumpy, I recommend sifting it into the mixture.
Beat in the rest of the powdered sugar about 1/2 cup at a time, alternating with 1 tablespoon of cream until the desired thickness and sweetness is reached. Optionally, beat in a little more peppermint extract and a few drops of red food coloring.
If you lined the pan with parchment paper, lift the bars out of the pan using the parchment overhang and place on a cutting board. If you simply greased the pan, then leave the bars in the pan.
Frost the cooled bars using a flat-edge knife. Sprinkle with crushed peppermint candy.
Slice with a sharp, thin knife (not a table knife) and lift the bars out of the pan using a metal spatula.