If you get the following error when attempting to create a Purchase Order with Project/WBS related line items:
No instance of object type PurchaseOrder has been created. External reference: ; Purchase order still contains faulty items ; "Material purchase order" is not allowed
The issue may be that the Project (to which you are trying to allocate the cost) is either unapproved or Inactive. Check the status of the WBS or Project that you have chosen and try again.