Query.

Dear Chris,

How are you?
I hope you are well and safe,
first of all i would like to ask you a question outside FR7 paper i hope if you could help me please,
the question says
The material cost for the product is estimated to be $16 before allowing for additional materials to allow for shrinkage of 20% (for every 10 kg of material going in only 8 kg comes out).
how much is the amount of the material shrinkage?
SOLUTION

total amount of material shrinkage = $16 * 20% = $3.2
Is my answer correct or not and why?
Could you explain in details,please?

Thank you in advance.