Subcategories are used to accumulate amounts and units for reporting purposes. They provide a further breakdown of the estimate costs for labor, material, equipment, subcontract, and other.
You might set up subcategories to get totals for both in-house and rental equipment. Estimate reports would then include the amount and unit totals for each of the standard cost categories, as well as the totals for the in-house and rental-equipment subcategories.