With A, cast on 39 sts.
Rows 1-9: With A, knit
Rows 10 and 11: With B, knit.
Rows 12-47: Beginning with Row 1 of Fair Isle Chart, work chart rows 1-36.
Rows 48 and 49: With B, knit.
Rows 50-59: With A, knit.
Rows 60-62: With B, knit.
Work same as Front.
With B, cast on 7 sts.
Rows 1-3: With B, knit.
Change to A and work in Garter st (k every row) until piece measures 13 in. (33 cm) from beg, AT THE SAME TIME, inc 1 st each side every 3 in. (7.5 cm) 3 times - 13 sts. Mark each end of last row.
Continue in Garter st with A until 12 in. (30.5 cm) above markers, mark each end of last row.
Work even in Garter st until 4 in. (10 cm) above second set of markers, dec 1 st at each side of next row - 11 sts.
Continue in Garter st with A, until 12 1/2 in. (32 cm) above second set of markers, AT THE SAME TIME, dec 1 st at each side every 3 in. (7.5 cm) twice more - 7 sts.
Change to B and knit 3 rows. Bind off.
Sew Gusset between Front and Back, lining up markers with corners. Sew on handles. Weave in ends.