HOW CAN I ADD SETUP CHARGES FROM AN OUTSIDE PROCESSING VENDOR TO THE COST OF AN ITEM.  I ENTERED  THE SETUP CHARGES AS  A NON-INVENTORY PART NUMBER WITH A "RAW INVENTORY" CLASS AND ENTERED THE SETUP CHARGE COST TO SETUP CHARGE VIA IN-L-A.  I ENTERED THIS PART TO THE MAKEFROM PART # BOM, WHICH ADDED THIS COST TO THE STANDARD COST.  THEN I RECEIVED THIS SETUP PART # VIA PO-C, USING THE TOTAL PCS THAT THE SETUP CHARGE COVERED.  BUT WHEN I WENT TO BOOK VIA GL-0, I NOTICED THAT IT WOULD BOOK THIS AMOUNT TO MY RAW INVENTORY ACCT, BUT SINCE I HAVE IT AS "N", THERE WOULD BE NO PHYSICAL AMOUNT, THUS BOOK TO PHYSICAL WOULD BE OFF.  WHAT AM I DOING WRONG?

No, that won't work either.  The problem is that a type M (Make From) part assumes you are providing all the BOM components for the vendor to use so it is crediting and debiting your accounts and in this case, the Setup charge shouldn't be a credit against anything because it is not being provided as a component.  I can't think of any really good way to do what you want within the Make From item type.

Are you using Work orders?  We apply setup charges, certifications to heat treat, 100% testing etc. directly to workorders for outside services (they are separate lines on the P.O.).  
 
I setup a part number called "Setup", Non-inventory item, coded to the same class I code my outside services to.  It posts to the WIP account and the Work order, then onto finished goods when I enter finished production.

Oops, you're right, I'm not using it on M type items.