Final answer:
When under CVFR within a controlled low level airspace above 12,500 feet, pilots should set their transponder to Mode A, code 1200 plus Mode C.
Step-by-step explanation:
The question refers to the correct transponder code to set when flying under Controlled VFR (CVFR) within a controlled low level airspace above 12,500 feet. The appropriate code to use is Mode A, code 1200 along with Mode C, which provides altitude encoding information. Hence, the correct answer is (b) 1200.
It is essential for pilots to correctly set their transponder codes according to the type of flight and airspace category as this helps in maintaining the safety and efficiency of airspace by ensuring air traffic controllers have accurate information about the aircraft in their sector.