I had this activity out last month, with all the birthday celebrations she made me several "cakes" with this one! She found it just the right amount of challenging to do, it took a few goes to get the thicker lollipop sticks into the foam, but once she'd mastered it, she was good to go.
To set this up, you need a block of styrofoam (I cut a square block in half), some toothpicks, some lollypop sticks, large beads, and I added in styrofoam stars. I sourced all of this (that I didn't already have stashed away!) at my local Spotlight, it's cheap, and there are HEAPS of material left to use for other things (lollipop sticks and toothpicks make great accessories for playdough cakes).