Order has no variance key

What causes this issue?

You are attempting to calculate variances for an order. However, you
have not entered a variance key for this order. The variance key
determines such things as whether scrap costs are reported separately
when the variances are calculated.

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?

You enter the variance key in the costing view of the material master
record. It then appears as a default value in the orders created for the
material.
To enter the variance key for a production order or a process order,
access the order and choose <LS>Header -> Master data</>.
To enter the variance key for orders whose costs are collected on a
product cost collector, access the master data of the relevant product
cost collector in change mode.
To ensure that the variance key always appears by default in the costing
view, you can go into Customizing and enter it as a default value
separately for each plant.
If you have already created the material masters and subsequently want
to transfer the variance key defined as a default value for each plant
to the material masters, run report <ZH>SAPMKKS1</>.
<DS:TRAN.SE38>Proceed</>

Error message extract from SAP system. Copyright SAP SE.