the question asking you the total standard material cost (which means the budgeted quantity x price of the material) you need to see how much material is needed for each quantity, to find this out is 1020 (metres of raw material) divided by 850 units produced (budget because the business expects it)
the standard cost for each metre is given of £8.20.
Now that you have standard meter per unit you can calculate how many metres you will require to calculate the total standard material = 890 units x 1.2 meter per unit x £8.20 = £8757.60
hope it makes more sense.
Btw I am doing the same module