Green.co and Blue.co are two small clothing companies that are considering leasing an embroidery machine together. The company estimated that in order to meet production, Green.co need the machine for 700 hours and Blue.co needs it for 300 hours. If each company rents the machine on its own, the fee will be $80 per hour of usage. If they rent the machine together, the fee will decrease to $55 per hour of usage.

a. Calculate Green.co and Blue.co respective share of fees under the stand-alone cost- allocation method

b. Calculate Green.co and Blue.co respective share of fees using the incremental cost- allocation method.

c. Calculate Green.co and Blue.co respective share of fees using the Shapley value method. d. Which method would you recommend Green.co and Blue.co use to share the fees? Why?