9904.407-40 Fundamental requirement.
Primary source
Verbatim text below is from the Electronic Code of Federal Regulations (eCFR), a public-domain U.S. government work. Always verify the current version with the eCFR before relying on it for any legal matter.
Full Text
Standard costs may be used for estimating, accumulating, and reporting costs of direct material and direct labor only when all of the following criteria are met:
(a) Standard costs are entered into the books of account.
(b) Standard costs and related variances are appropriately accounted for at the level of the production unit.
(c) Practices with respect to the setting and revising of standards, use of standard costs, and disposition of variances are stated in writing and are consistently followed.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.