Mix all dry ingredients together reserving 3 1/2 cups of flour.
In a small pan, heat the milk, water and butter. Add the liquid mixture to the dry mixture. Beat well. Mix in the eggs and 1 1/2 cups of reserved flour. Beat well some more.
Add the rest of the flour a little at a time until you have a dough mixture, you might need extra flour.
Knead the mixture on a floured board for 10 minutes.
Put the dough in a greased bowl and allow it to rise until it has doubled in size. This will take about an hour and a half.
Punch the dough down and reshape it, adding some bone shapes on top to decorate it. You could also shape it into an animal shape or an angel shape. If you like, now is the time to put a tiny plastic skeleton inside. Let it rise another hour.
Bake at 350° F for about 40 minutes.
After baking, sprinkle it with confectioners' sugar and colored sugar.