You should now have 36 rectangles joined with a light and a dark fabric with the light being the smaller part of the rectangle.
(If you are doing the larger quilt you should have 144 pieces).
Using Scraps
Now join the 3½" x 2½" light to the 3½" x 2½" dark to form a rectangle 6½" x 2½".
You should have 36 pieces (or 144 if doing the larger quilt).
Using yardage
From the 1/3 yard light cut strips 3 ½" wide
From the 1/3 yard dark cut strips 3 ½ " wide
Join these strips and press towards the dark.
Now cut these into 2 ½" pieces.
Continue until you have 36 pieces for the small quilt or 144 for the large quilt.