Passing arguments to multiple functions

I have 2 general questions about function programming.

Consider the following 3 functions:

result = fun3(fun2(fun1(param1))); // param4

function fun1(param1) {
    // ...
    return param2;
}
function fun2(param2) {
    // ...
    return param3;
}
function fun3(param3) {
    // ...
    return param4;
}

Each function expects 1 parameter, does some computation and returns a variable.
In my case, every subsequent function relies on the output of the preceding function.

1. Is the solution in my example a common practice? Or are there better ways?
2. What if a function produces 2 outputs and 2 different functions need them?

Like in this example:

function fun1(param1) {
    // ...
    return param2, param3;
}
function fun2(param2) {
    // ...
    return param4;
}
function fun3(param3) {
    // ...
    return param5;
}

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PS: Although this is a general programming questions, maybe it could be important to mention, that I use PHP.