Allocation cost element & is not supported

What causes this issue?

You have entered cost element &V1&, but this has not been created yet in
the respective controlling area.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Create cost element &V1& as an allocation cost element, or
Correct your typing error.

Error message extract from SAP system. Copyright SAP SE.