The correct answer is: C. Per unit rate.
Selling and distribution overheads are absorbed on a per unit rate basis because this method allows for a more accurate allocation of costs to individual units of product. By using a per unit rate, companies can ensure that all of the costs associated with selling and distributing their products are included in the cost of each unit sold. This can help companies to better understand their profitability and to make more informed decisions about pricing and marketing.
The other options are incorrect because they do not provide a consistent or accurate way to allocate selling and distribution overheads. Option A, percentage on selling cost, would result in different amounts of overhead being allocated to different units of product, depending on the selling price of each unit. Option B, percentage on factory cost, would result in different amounts of overhead being allocated to different units of product, depending on the cost of manufacturing each unit. Option D, none of these, is incorrect because it does not provide a specific answer to the question.
In conclusion, the correct answer to the question “On what basis are the selling and distribution overheads absorbed?” is C. Per unit rate. This method allows for a more accurate allocation of costs to individual units of product and can help companies to better understand their profitability and to make more informed decisions about pricing and marketing.