Carving/whittling and choosing wood

My boy is really into cars right now, and part of this manifests in an interest in collecting Hot Wheels cars (and to a lesser extent, Matchbox). He’s not a collector in the leave-it-pristine-in-the-box sense. He’s eight and a half, so he wants to play with the cars. Last week he went to the LA County Fair with his mom and they bought a car there for him. Not a Hot Wheels, but something made by Racing Champions (whatever that is). Point is, the thing came with a stand. This gave him the idea that we should make stands for all of his cars, or a select few. And by ‘we’ I mean me. And by ‘a select few’ I mean fifty to a hundred.

At any rate, he set to designing the stand logo for each car yesterday. Here’s the one he’s got:

As I watched him do the rough design of the logos I asked him what he thought we were going to make these things out of. “Wood, of course.” Then I asked him what he was going to design the final labels on, and how he was planning to affix them.

“Me? I’m not making the labels. You are. Out of wood.”

“How am I doing that?”

“You’re carving them.”

Now I don’t know the first thing about carving. His mother suggested we go to Michaels and get a wood-burning kit (she wants no part of this; it’s a father/son project), but he rejected that. I had an idea last night that I could use my dremel tool if I could get the right bits for it, but I don’t know.

Any ideas? And for starters, what kind of wood would be easiest and most forgivable for this kind of project?