24.50.150 Priority When Goods Are Commingled or Processed

(a) If a security interest in goods was perfected and subsequently the goods or a part thereof have become part of a product or mass, the security interest continues in the product or mass if:

(1) The goods are so manufactured, processed, assembled or commingled that their identity is lost in the product or mass; or

(2) A financing statement covering the original goods also covers the product into which the goods have been manufactured, processed or assembled in a case to which paragraph (b) applies, no separate security interest in that part of the original goods which has been manufactured, processed or assembled into the product may be claimed under Section 24.50.140.

(b) When under Subsection (a) more than one security interest attaches to the product or mass, they rank equally according to the ratio that the cost of the goods to which each interest originally attached bears to the cost of the total production or mass.