1.2 x 10^3 is equivalent to 1200. 1 & 2 are signficant because they are real numbers, the 0's do not play a role in significant figures in this setup particularly because no decimal point is given. However, if a decimal point was present it would have 4 signficiant digits and you equation would look something more like, 120.0 x 10^1.
Hope this explains it a bit more!
