In this step make a stop cut that defines the bottom of the mustache, and remove some wood up to this stop cut.
Next you can texture the beard with a V-tool or leave it untextured. It's optional whether you wood burn the bottom of the cuts between the colors. On the example I did wood burn between the white parts of the hat and the rest of the piece. Then I like to scrub the piece with a stiff denture brush and liquid soap. After rinsing the piece, and letting it dry paint it.