Assuming you are using the material library, you would select the 1/8 plywood material and, for the various types of ‘cuts’ you have, select the cut in the cutlist (eg C02 Line engrave), select the ‘Engrave’ for the 1/8 Plywood, and then press Assign to Layer.
If you’re not using the material library, then you can simply change your cut settings to the values appropriate for 1/8 plywood. I recommend using the material library however and there is a very good tutorial about that here: