Yes, that is bacon sprinkled on a donut. If you've ever thought to yourself, I love bacon AND donuts, this is the breakfast of choice for you.
We saw these earlier in the week while at Rainbow Donuts. There must be robust enough demand for bacon-sprinkled donuts to warrant making* at least a whole row of them. I was tempted to get one in the two dozen I was getting for a work meeting, but I decided against it. I think people would have been confused about what it was without a similar "BACON DONUT" sign to accompany it.
* "making" makes it sound like it took a lot of effort, but it probably just entails cooking up a few strips of bacon, chopping it up, then sprinkling over a regular donut