Step 1 Heat the oven to 375 degrees. In the bowl of a stand mixer fitted with the paddle attachment, or in a large bowl using a hand mixer, cream the butter and shortening. Add the salt and sugar, and continue to beat until the mixture is light and fluffy, 3 to 5 minutes. Add the egg and beat well. Beat in the orange extract, then the flour. Mix in the coconut and chopped nuts by hand.
Step 2 Drop rounded tablespoonfuls of dough onto an ungreased cookie sheet, spacing the cookies 2 inches apart. Bake until the edges are lightly browned, 10 to 14 minutes, rotating the cookies halfway through for even baking.
Step 3Cool the cookies on the pan for 1 minute before removing. Sprinkle with sugar and set aside to cool completely before frosting.