Ah yes, this is what I used to do with my Action Replay MKVI when I made earlier C64 games in the 1990s by using the Shoot Em Up Construction Kit. Another trick would be to create and save a snapshot to a specifierd file, then use VICE Snapshot to PRG converter, if you use VICE V3.7 or above. :)
True, what Richard wrote, also the thing with the VICE snapshots and one thing more about this whole freezing thing. The mentioned Action-Replay freezer is probably even a bit better, than the FC3 freezer, but especially when it comes to the SD2IEC hardware, freezing with the FC3 has the advantage, that the FC3 fastloader is already included in the SD2IEC firmware and fully compatible, when it comes to loading this freeze on the SD2IEC in the end. When using an AR cartridge, then it depends on the size of the freezed file. When the file is small enough, that the AR can create a onefiler, out of the freeze, then it's no problem on a SD2IEC and even better, than having two freezed files (that the FC3 always creates), but when the AR must also create two files, out of the freeze (for example when it's to big for one file), then SD2IEC users have the problem here, that the AR fastloader is not compatible and the second file then can not be loaded, on a SD2IEC.