The process is 1) draw top stitching lines on the right side of the overlay, 2) draw stitching line on the "wrong" side of the flannel, 3) baste flannel to overlay at two edges, your choice, 4) draw stitching line on the front of the vest.
|Shows how the stitching line matches up|
After you match the shoulder pin. Top stitch the diagonal edge at the bottom of the overlay then work you way up. Start at the armhole edge and work to the center front. At the beginning leave a long thread to pull through and tie off or stitch a couple of stitches at "0". This will secure the stitching.
The sample to the left shows the look of the different the stitch lengths. (Note 4 is a gathering stitch on my machine, 2 is the normal setting.) I chose 3.
The finished look is to the right. You'll notice the overlay does not extend to the front edge, this is okay, it will be part of a turned under edge where I did not want the extra fabric. Look closely and you'll see the bottom line narrows as it goes toward the center.
Need more information? A better explanation? Just let me know with a comment and I'll do my best to clarify.