Given for XM Company the following data for January 20X1.
Direct material purchased and used in production accounted for $	100,000
Units purchased	10,000
The standard units	10,200
Managers estimate price variance not to exceed +2% of the (actual units X standard price) as favorable variance. The standard price should be

	1.	Greater than actual price paid for each unit
	2.	Smaller than actual price paid for each unit
	3.	The same as the actual price paid for each unit
	4.	More information is needed