Costing of non-standard Expense work order - expense subinv WIP source

Hi - we are a project manufacturing, non-WMS, standard costed discrete manufacturing org.

We want to take in customer returned material for repair and send back out. Since we do not own this material, we plan to return/receive into an Expense subinventory. In the item master, the item/material is setup as a costed/asset.

Then create a non-standard expense WIP class discrete job where the returned it is also the discrete job assembly and component on the discrete job. Completion subinventory of the job is the same expense subinventory(for now).

When we do a WIP Material transaction to generate the WIP Issue of the component, the cost manager runs and updates the mtl_material_transactions.costed_flag='E' with the code/message CST_INVALID_WIP/The wip entity is either not defined or does not have a period balance entry..