sourceSets

In the productFlavors section, you can see which sources and resources each flavor refers to:

sourceSets {
     flavorBlueTest {
         java.srcDirs = ['src/blue/java']
         res.srcDirs = ['src/blue /res']
     }
     flavorBlueProd{
         java.srcDirs = ['src/blue/java']
         res.srcDirs = ['src/blue/res']
     }
     flavorGreenTest{
         java.srcDirs = ['src/green/java']
         res.srcDirs = ['src/green/res']
     }
     flavorGreenProd {
         java.srcDirs = ['src/green/java']
         res.srcDirs = ['src/green/res']
     }
 } 

The java.srcDirs and res.srcDirs objects determine which folder is being referred to for a particular flavor (or flavors).

In this project, resources such as text (values.xml) and colors (colors.xml) are defined under the /src/main/res folder:

As you can see, there are, besides the main folder, two other folders: blue and green. Under the blue/res and green/res folders, you will find the files and values that override the default resources...