Cost element missing from BOM item with purchase price

What causes this issue?

In the BOM item for material &V1& a procurement price was maintained
but no cost element was provided. The item is probably a 'non-stock
item'.

System Response

The cost element is a required entry in costing.

How to fix this error?

Please assign a cost element for the BOM item.

Error message extract from SAP system. Copyright SAP SE.