Yes, if you want to be very nit-picky the question is undefined, but this is a third grade math test and the only reasonable answer is 20min. The student was absolutely correct.
I've seen enough of that in high-school physics where the teacher literally doesn't understand what the hell the problem is asking to piss off the Good Humor man.
Some inferences have to be made, this is a human taking the test not a robot, and it's a 3rd grade test.
Even if the size of the pieces were specified, she could be cutting a different kind of wood or using a different saw or the humidity level could be different, but she's still "working just as fast".
3rd graders would be confused if you attempted to be completely unambiguous with this time of question.
(Not saying I like it, but it's the way it is many places.)
The answer given is the only one it is possible to give. Therefore, it must be the correct one.
The context isn't so much "third grade" as it is "math test", and very, very few math tests allow "Question ill-formed as posed" as a valid answer. Maybe more should.
* (the feeder competition for the British Mathematics Olympiad, and then the International one)
It's not the teacher's fault, per se; the question is unanswerable. The student picked one interpretation but the (likely) correct one is shown in the answer http://math.stackexchange.com/a/380007