Mix sugar, margarine, milk, vanilla, peppermint extract and egg. Then, stir in flour and salt. Use 1/2 teaspoon of red food coloring to 1/2 of the dough to make it red. Cover and refrigerate for at least 4 hours. For each candy cane, shape 1 tsp dough from each half into 4 inch rope by rolling back and forth on a floured surface. Place 1 red and 1 white rope side by side; press together lightly and twist. Place on an ungreased cookie sheet, curve top of cookie dough to shape like a candy cane. Bake at 375 degrees for 9 to 12 minutes. Immediately sprinkle on granulated sugar after removing from oven.