Essentially, you round up all your crayon pieces and if they aren't already peeled, you peel them. You decide if you want basic muffin cup shapes or something fancier. Muffins cups can be lined with paper. Put in an ample amount of crayons because they melt to less than what you think. 250 degrees for 15-25 minutes works great.
If you want to do a little more work, melt individual colors on the stove top or microwave (did not try this) and pour them into candy molds or some other mold.
Let the crayons cool off pretty good before peeling.
Let the kids color! They will be fascinated about how the crayons melt, about the colors that mixing makes, about rainbows and tie dye, and about the texture they produce when they use them to color, etc.
All my pics are here.