Oops! I forgot to mention one little thing in the fabric requirements. You will also need fusible web for each letter, such as Pellon or Heat 'n Bond. Be sure to have enough to cover each square of fabric you have for each letter. For the Lap size, you should have a 10"x10" square per letter; and for the Twin size you should have a 12"x12" square per letter.
Also, I had to update the background yardage for the Lap size to 3 yards (or 3 1/4 for good measure). Apparently I forgot which way I did the layout when I did my math, and found a much simpler way today. The original post has been updated to reflect these changes.