To start let's assume that you're using some reaction to make some compound in the lab. There are two "products." First the products as given in the the chemical formula for the reaction and second there are the products that you collect. The products that you collect are never absolutely pure. 99.99% pure would be essentially pure since working to 4 significant figures in a typical chemistry lab is very good work. But that isn't absolutely pure.
Now to discuss the problem you posed. This is just a made up problem and to worry to much about the details will send you down the rabbit hole.
But let's think about the problem this way. Suppose you are going to do the reaction in a crucible and after the reaction is complete you crack the crucible with a hammer to get the "button" of metal as the "collected product."
Now the stated problem throws in some wrinkles to see if you understand chemistry and are not just solving a math problem.
First the problem states "the reaction of 20 grams of hematite" but then the problem backpedals and states that the hematite is only 60% pure. Who knows what the other 40% is. Make the assumption that the 40% is inert. (The problem would have been better stated as the reaction of 20 grams of hematite ore which is 60% pure.)
The problem states that there is "a sufficient amount of pure aluminum" which means that there is at least enough aluminum to react with all the hematite.
Now, as in my contrived experiment, the problem states that the button of metal produced is only 70% iron. Let's assume that 12.0 grams of hematite should yield x grams of pure iron. Then the button would weigh x/0.70 grams since it is impure.