Item category:
Item categories are defined so that you have more control over individual materials in the deliveries. The item category is copied from an order item. A standard item in a standard order then becomes a standard item in the delivery. If a delivery is entered without reference to an order, the system proposes the item category depending on the delivery type and the item category group of the material.
VOV7 is the Tcode for creating new item categories and VOV5 is the tcode for item category
Item category usage helps in defining whether the material is used as the text item,batch split or as a service item.
You can specify the item category usage while defining the item category for a particular sales document type.
Reward points if it helps
