Grade categories are useful for grouping assignments together, calculating subtotals, and making special calculations (e.g., dropping the lowest grades). 

Edit Category Settings

Category settings can be made while creating a new category.
To add a category, see Create & Organize Items & Categories in the Moodle Gradebook.

To modify the settings of an existing category:

1. On your main course page in the Course Management panel (black gear icon , top right), under Grading, click Gradebook setup. The Gradebook setup page will open.
2. Locate the row that contains the title of the category. In the Actions column (at right), click Edit and from the drop-down menu, select select Edit settings. The Edit category page will open.
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   Note: The Edit category settings for the course total can be found in the top row of the Categories and items table.
3. Click headings to open collapsed settings areas and click Show more... to view and adjust additional settings under a heading.
   Note: You can click Expand all to collapse settings for all of the headings at once. Explanations of the most commonly used gradebook category options are described below. For more advanced settings, please see Advanced Grade Item Options in the Moodle Gradebook.
4. When finished adjusting settings, scroll to the bottom of the page and click Save changes. You'll be returned to the Gradebook setup page.

Grade Category Options

Category Name

This name replaces the default "Category total" name that displays in the Grader report and the User report. This is useful when you use multiple categories in order to differentiate total columns.

Aggregation

Determine the kind of calculation used to compute the category total.

• Mean of grades: Average of all grade items in the category (the sum of all grades divided by the total number of grade items).
• Custom weights: Each graded item is assigned a value used to determine the relative importance of the item in the overall calculation. The value does not need to be the same as the possible points for an item. If an item has a weight of "0," it will not be calculated in the total.
• Natural: The sum of all grade values in the category.
  
  For more information about aggregation methods, see Grade Calculation in Moodle.

Click Show more... to access the following options:

Exclude Empty Grades

Control what the category does when grade items have empty scores for individual students:

• Selected (default): Empty grades are skipped in the calculation and do not count against students.
• Unchecked: Empty grades are calculated as "0".

Drop the Lowest

Enable a specified number of the lowest grades to be excluded from the category total. This option begins dropping the lowest grades once there are more grades entered than the number of lowest grades to drop (e.g., if a category is set to drop the 2 lowest scores, the 2 lowest scores will not be dropped until 3 or more items in that category have entered grades).

Note:  When using Natural weighting, dropping the lowest grade is only allowed when:

• all children of the category have equal weights
• all children of the category have equal max grade
• there are no sub categories in the category
• there are no extra credit items in the category

Category Total Options

The most commonly set options under Category total include:

Grade Type

Determine the type of grade associated with this category. There are four grade types:

• None: No grading possible.
• Value: A numerical value with a maximum and minimum.
• Scale: Select a rating from a list (see Standard & Custom Grading Scales in Moodle).
• Text feedback only: Instead of a value, display text you enter.

Maximum Grade

Determine the maximum grade when using the Value grade type. The maximum grade for an activity-based grade item is set when you add or edit the settings for the activity.

Hidden

Hide grades from students. A Hidden until date can be set under Show more... if desired, to release grades after grading is completed.

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Locked

Prevents grades from being updated. A Locked after date can be set under Show more... Use with caution, it is easy to forget if you have checked this option.

Click Show more... to access the following options:

Grade Display Type

Control how the category total will display in the Grader report and the User report.

• Letter: The numerical total converted to a letter value using the scale found on the Letters tab of the gradebook. To configure the letter scale used for this conversion, see Letter Grades in Moodle.

• Percentage: The numerical total divided by the maximum possible points.

• Real: The numerical total calculated by the category.
• Overall decimal points: The number of decimal points to display for each grade.
  Note: This setting does not round values in calculations. If the category total is used in another calculation, the real numerical value will be used, which has an accuracy of 5 decimal places.

Parent Category Options (Adjust Category Weight)

Under Parent category, Moodle reports the name of the parent category and the aggregation method it is set to use. If the parent category is set to Custom weights or Natural, you can assign a weight that the grade item will have inside the parent category.

• If the parent category is set to use Custom weights, in the Weight entry box, enter a value for the weight this category will have inside the parent category. (Within all of the subcategories of the parent category, the weight values do not need to add up to 100.)
• If the parent category is set to use Natural aggregation, category weight is automatically calculated by default. To enter a custom weight for this category, check the Weight adjusted checkbox, then enter a custom value. All other weights will adjust in response to the amount you set here.

Note: You may find it more intuitive to set category weights on the Gradebook setup page where you can view and edit weights for all the items in your gradebook.