Coat a 9x13 baking dish with cooking spray. Set aside.
Combine 2 cups sugar, applesauce, Jell-O, unflavored gelatin and lemon juice in a large saucepan. Stir to combine. Let stand for 1 minute.
Bring to a boil over medium heat stirring constantly.
Boil for 1 minute and then immediately pour into prepared baking dish.
Refrigerate until firm - about three hours should do it. I left mine in overnight.
Cover a large cutting board with parchment paper and sprinkle with sugar.
Loosen the sides of the gelatin with a spatula and invert onto parchment paper.
Use small, sharp cookie cutters to cut out gumdrops. If needed, you can dip the cutters into hot water first. You may need to periodically rinse off the cutters as well to keep them clean.
Leave the cutout gumdrops on top of the sugar-coated parchment paper for about 8 hours or until just slightly sticky.
Roll the gumdrops in the remaining sugar and store in an airtight container.