When to Use?
When you create a gradable item, it automatically appears in the gradebook and is associated with the appropriate category.
Procedure
You can use categories when you create calculated items, such as an assignments average.
You can create new categories to customize how coursework is grouped in your course. You can use custom categories when you set up the overall grade.
To create a new gradebook category, select the Settings icon in the gradebook. In the Gradebook Settings panel, select Add New Category and type a name.
Each time you create a graded item in your course, you have the option to change the grade category so the item is grouped into one of the custom gradebook categories. On the Gradebook Settings panel, select the custom category in the Grade Categories menu.