Cream shortening; gradually add sugar, beating until light and fluffy. Add eggs, one at a time, beating well after each addition.
Combine flour, baking powder, and salt; add to creamed mixture alternately with milk, beginning and ending with flour mixture. Stir in vanilla.
Pour batter into 2 greased and floured 9-inch round cake pans. Bake at 375° for 25 minutes or until a wooden pick inserted in center comes out clean. Cool in pans 10 minutes; remove layers from pans, and cool completely on wire racks.
Split cake layers in half horizontally to make 4 layers. Spread Custard Cream Frosting between layers and on top and sides of cake; sprinkle with coconut.