Needs revision. Change focus to modify existing output scheme and save as new. That will leave existing reporting unchanged.
(Editing this setting is allowed for Reports, but not for Schemes.)
Here is how to change the way levels are grouped in Material Report Output.
From the Output tab, click Reports.
Click the backpage button and Open Report.
Click Material Lists > select the report type as shown and right-click, Tools > Edit Report Settings.
In this dialog box, you can choose from three report "Breakup" methods: Current Level/Selection, All Levels Consolidated and All Levels Separated.
Click Open to see print preview.