In epidemiology, the formula A/PT, where 'A' denotes the number of new cases occurring within a defined time period, and 'PT' signifies person-time measured in days, months, or years, is employed to calculate an incidence rate. Could you please provide a thorough explanation of this formula, outlining its significance and applications in epidemiological studies, with a focus on how it accounts for the variable of person-time in the determination of incidence rates?"