RE: What engine size?
Don't just mount it where the instructions say to.
Mount the engine very last after servos, RX, and battery, using the engine (with prop and hardware and muffler) to set the rough CG to the midpoint where the instructions say the CG should be. Then you can use the RX battery to fine tune the CG position.
With only one ounce of difference I'd go with the 120AX.