In your expected output, you've got the second last row sum incorrect, it should be 40 according to the data in your tables, but here is the query:
Select ChargeNum, CategoryId, Sum(Hours)
From (
Select ChargeNum, CategoryId, Hours
From KnownHours
Union
Select ChargeNum, 'Unknown' As CategoryId, Hours
From UnknownHours
) As a
Group By ChargeNum, CategoryId
Order By ChargeNum, CategoryId
And here is the output:
ChargeNum CategoryId
---------- ---------- ----------------------
111111 1 40
111111 2 50
111111 Unknown 70
222222 1 40
222222 Unknown 25.5