Am I missing audio codecs?

Have recently purchased a Behringer* U-Phono USB converter. This can monitor the sound at the device* H/P socket but no output from iMac.

Have selected USB codecs for USB Input via the sound preferences menu and can see level meter pulsing so definitely getting in; however with output selected to built in speakers no output at all either by speakers OR heaphones socket on Mac. Am I missing something, like codecs? Have now spent hours with this and no further on.

iMac mountain Lion 10.8.5/ Behringer U-phono UF0202