Make or buy

Appler is considering the relevant cash flows involved in a short-term decision. An important client has asked for the minimum price for the processing of a compound. The compound involves the following:
Material A: Appler needs 500 kg of material for the compound but has 200 kg in stock present. The stock items were bought 3 months ago for $5/kg but have suffered 10% shrinkage since that date. Material A is not regularly used in the business and would have to be disposed of at a cost to Appler of $400 in total. The current purchase price of material A is $6.25/kg.
Material B: Appler needs 800 kg of material B and has this in stock as it is regularly needed. The stock was bought 2 months ago for $4/kg although it can be bought now at $3.75/kg due to its seasonal nature.
Processing energy costs would be $200 and the supervisor says he would allocate $150 of his weekly salary to the job in the company’s job costing system.

Based upon the scenario information, what is the total cost of material A and B to be built in to the minimum price calculation (to the nearest $)?

The answer provided is 4475. Why is shrinkage not considered and 300 KG of Material A is bought instead of 320.