Prepare cake mix according to package directions and bake in a 9 x 13 greased and floured pan.
During the last minutes of baking, bring to a boil, 1 cup sugar, 1 cup milk and marshmallows. Watch closely, it burns easily. Remove from heat and stir in coconut. Pour over cake as soon as it comes out of the oven.
For frosting, bring to a boil, 1/2 cup milk, the butter and 1 cup sugar. Add chocolate chips and stir until they are melted. Pour over second layer of cake and refrigerate overnight.