In large bowl, cream the butter, cream cheese and sugar until light and fluffy. Beat in egg yolk and extract. Combine the flour, baking powder and salt; gradually add to creamed mixture and mix well. Stir in 3 cups coconut. Cover and refrigerate for 1 hour or until dough is easy to handle.
Roll into1 inch balls and roll in the remaining coconut. Place 2 inches apart on ungreased or parchment lined baking sheets.
Bake at 350 degrees for 10-12 minutes or until lightly browned. Immediately press a maraschino cherry into the center of each cookie. Cool on pan for 2-3 minutes. Remove to wire racks to cool completely. Yield 4 dozen. Cookies are delicious cold.
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