Who's paying for the supplies and your time? Obviously your boss had no idea of the amount of time required or the potential cost. I would decline and remind the boss that the children's mothers would rather have something actually made by their children, not a teacher.

Use muslin for the front, get some old broken crayons and SCRAPE little bits of different colored crayons onto the muslin, them top with a nonstick sheet of baking paper or foil from your kitchen and iron it to melt the crayons. If it looks like a flower or something specific, add a few stems, leaves, or whatever and iron again. If it doesn't look like much add some dots, bubbles, or something silly and iron again. These are cute, simple, and need some imagination from the "artist" to decide what they look like. Add a layer of batting, sew around 3 1/2 sides leaving an opening for turning. Turn right side out, turn the opening edges to the inside and stitch all around the outside edge about 1/4 inch in and you are finished! Have the artist sign the back and mom will love it!

I'm still thinking about what kind of wine........ha ha.

Any art project, be it made out of paper or clay or whatever is paid for with school funds! That is how schools operate. I think it is a terrific idea, especially the handprint!

YES, the children should be making them!! It's kind of sad that the teacher has resorted to you, the out of classroom source. And since she has, I do hope you are getting paid for your time, efforts and materials!

This is the best idea yet! Hand prints would way too large. With this, the children are actually making the design, whatever that may be, and adults are helping with the ironing.
But I wouldn't bother with the turning. Let the children sandwich the three pieces with glue (with help), and then just sew around the outer edge 1/4 inch from the edge and leave the edges raw. Pinking here would be great.
Parents want something their children had a hand in that shows, like a scribble or sprinkle that they made themselves.

Do a hand print and date.

I saw this poem online, maybe here on QB and thought it was cute.

Mug Rug Poem

Hope you enjoy this little rug.
It's meant to fit a cup or a mug.
So when you're having your coffee or tea,
I hope you'll smile and think of me.

When I was room mother for my son's first grade, their teacher was getting married. I decided a quilt from the kids would be something she'd always remember. I bought (with their money) white cotton and some "fabric" markers and cut squares for each child to draw a picture and sign it. I took them home, added sashing and put the quilt together. She was so surprised; and to this day, she still has the quilt. That was about 32 years ago.

I like the hand print idea, if the kids are young enough then it would fit great!