Cost element & is not supported for cost allocation

What causes this issue?

You have entered cost element &V1&, which exists in the respective
controlling area, but does not have the cost element type for
allocation cost elements.

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?

Use a different (allocation) cost element, or
Correct your typing error.

Error message extract from SAP system. Copyright SAP SE.