Place Chex cereal in a very large bowl. Unwrap Kit Kat bars. Finely chop 6 snack size bars (about 3 ounces). Break apart the rest of the bars and cut each bar into 4-5 pieces. Keep the two piles separate. Line a cookie sheet with parchment paper or a silpat baking mat.

Place milk chocolate chips and oil in a medium bowl. Heat on high power in 30 second increments, stirring well between each, until melted and smooth. Stir in finely chopped Kit Kat pieces, then pour over Chex cereal. Toss carefully with a spoon to coat completely.

Place 2/3 cup powdered sugar in a large gallon size bag or large Glad storage container. Add half the chocolate coated Chex, seal the bag or container, and shake to coat. Pour onto prepared cookie sheet, then repeat with another 2/3 cup powdered sugar and the rest of the chocolate coated Chex.

Let sit until set, about 15-30 minutes depending on the temperature in your kitchen. If desired, do a second coating of powdered sugar by placing remaining 2/3 cup powdered sugar in a large gallon size bag or large Glad storage container and add all the muddy buddies.

Add chopped Kit Kats to cooled Muddy Buddy mix. Store in an airtight container for up to 1 week.