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In this Excel tutorial by Chris Menard, he explains the concept of a calculated item in a PivotTable. He begins by outlining the setup, with seven fields including Dealership and Cost. Menard distinguishes between two types of calculations: a Calculated Field, which involves operations between different fields (for example, subtracting values), and a Calculated Item, which focuses on deriving insights from a specific field. He uses the years 2021 and 2022 to illustrate how to calculate the difference between these years and find the percentage change, emphasizing the process of utilizing a calculated item within the PivotTable framework.