that works out just right - visualize the profile of the finished quilt - on the top, the single strip will have a 3/8 seam allowance on each side with the other 3/4 inch covering the raw edges on the top when finished. For the bottom, if you again visualize the profile - you have 3/8 inch in the seam allowance, another 3/8 to fold back over the edge, a third 3/8's to cover the seam allowance on the adjacent block plus a little extra to allow you to machine stitch and cover the original seam in the block....double that amount, with 3/8 inch seams, and you have the 2.5 inches they tell you to cut. If for some reason you decide to use another size of seam allowance, recalculate the width of strips as above.