In a different microwave safe bowl, pour in the bag of chocolate chips. Microwave on high for 1 minute, stir and microwave for another 30 seconds. Stir until melted.
Pour melted chips over the cereal and gently mix with a rubber spatula.
Add sprinkles and mix until cereal is evenly covered.
Using either a 1 gallon container or a brown paper bag, pour the covered cereal into it. Add the cake mix and the powdered sugar. Put the lid on the container or fold the bag down tightly Shake until the cereal is completely covered.