This is a futon. It's part sofa, part bed, but so much cooler than a sofa-bed.
If multipurpose furniture were Transformers, the futon would be Optimus: confident and understated; the sofa-bed would be Wreck-Gar: trashy and hyphenated.
In building this, we want a functional, sturdy (hopefully aesthetically pleasing), affordable piece of furniture that will last you at least through college with proper care. Most importantly, it must be comfortable. However, this is largely up to you. I can recommend the cushion materials and methods for making the cushion itself, but how they feel to you and what you are getting for your money will be independent of what I say or do. In other words, for comfort, you're on your own. Just use your best judgment, and if you want, experiment with other methods.
This is a low-profile, smaller futon. The futon frame will be approximately 23.5" high, 28" deep, and 80" long. If you include the seat, it will be ~34" deep and 42" high. As a bed, it will be 54" deep and 25.5" high.
The combined mattress is 54" x 72". This is slightly shorter than a standard full. The reason for this is that a standard sheet of plywood is only 48" wide, and 24 is a factor of both 48 and 72, thus, using six 24" x 27" cuts, we can get away with a single sheet of plywood. If we made it standard full, 54"x75", we would need two sheets of plywood to accommodate the dimensions we need (six 25" x 27" pieces). I realize that in reality, we won't get two 24" pieces from a 48" piece. Because of the saw, we'll end up with a 24" piece and a 23.75" piece or so. But, for our purposes, it's fine.
Cushion thickness will vary depending on the materials you use and how much you use, but expect around 4-5 inches of thickness with my method. For reference, my old futon had a 3" mattress and I had no trouble sleeping on it. The mattress itself will be split into 6 sections of 24" x 27" for modularity. The ability to remove small sections of the seat is very important to me, in case I need to clean it, or replace/repair it. Of course, you could make the mattress in however many pieces you wish.
The seat will be about 16" off the ground where your legs hang off. The armrest will be 23.5" high. In the bed position, the bottom of the mattress will be about 14" off the ground.
You could easily build this entire futon using bolts and screws reinforcing butt joints, but there would be a lot of visible hardware showing. In an effort to maximize aesthetics, I intentionally set out to build this with as few bolts, screws, or nails showing as possible. The best way to reduce the number of visible fasteners is to reduce the actual number of fasteners. Because of that, this futon is largely held together by mortise and tenon joints and hidden fasteners. As a matter of fact, almost every major joint load-bearing is a mortise and tenon joint. The only exceptions will be the long pieces of the frame, which are held together with a lap joint and reinforced with 2 bolts. Every other non-major joint will be a dowel inside a butt joint. The rear of the frame is reinforced with a few screws (a pocket-hole joint), but it is still fundamentally a mortise and tenon joint.
I lack the sewing skills necessary to make the cushion with a removable cover, so the covers in this project are stapled onto wood. If you have the know-how to make zippered covers, more power to you.
Although I used other sources as reference material, the designs specified on this project are my own. They were cobbled together after careful observation of dozens of other futons both in real life and in photographs and schematics. It is not a copy of a single design, but an amalgam of them all, with some simplified ideas of my own thrown in. I have tried my best to give credit where it's due, but if there is any dispute, feel free to contact me. However, don't pull an Apple on me an say I stole your rounded corners. It's a futon - they all fundamentally look the same.
This design is a first draft. I drew it up once, and have made no major modifications to it - much like my English essays. And, if it's anything else like my English essays, it'll be barely passable.