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The mud houses are cooler in summer and warmer in winter. It happens due to the reason that:
A. mud is a good conductor of heat
B. mud is a bad conductor of heat
C mud works as an isothermal layer between ground and air
D. mud is a superconductor of heat

Answer
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Hint: We know that heat is a form of energy which can get transferred from one system to another. However the ability of a material or interface to allow or restrict the flow of heat depends on the nature of the medium.

Complete answer:
Here, in the given question, let us assume that the temperature inside the hut is $T_1$ and the temperature outside the hut is $T_2$.
Since there is always a difference between the temperature inside and outside the hut, we can say that the heat energy will flow from high temperature to low temperature.
In summer, $T_2\geq T_1$, then the heat from the outside must flow inside the hut, making it hotter.
During winter $T_2\leq T_1$, then the heat from the inside must flow outside the hut, making it colder.
But this is not observed, this means that the mud resists the flow of heat energy.
We know that conductors are materials, which allow the flow of heat energy, while insulators are materials which resist the flow of heat energy.
Then we can conclude that mud is a bad conductor or a good insulator of heat, and thus resists the flow of heat energy through it and hence, making it suitable to live in it.

Thus, the correct answer is option B. mud is a bad conductor of heat.

Note:
We know from energy conservation law, that “energy can neither be created nor be destroyed, it can only be transferred from one medium to another”. Heat also being a form of energy, hence follows the energy conservation law.