Class type &1 does not support configured objects

What causes this issue?

You have specified an incorrect class type for the product class. Only
variant class types can be used as product class types in iPPE. You
state which class types are variant class types in Customizing for the
classification system.

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?

Specify a valid class type.

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.