This is how I made scary signs and tombstones from thrown away construction foam. The pieces I used were scraps that were put in a dumpster at a building site. I left the pieces the size that they were, but if you want to cut the foam use either a serrated knife or an electric knife. I used a soft graphite pencil to draw with. First I divided the foam piece into how many letters are in the word and then drew out my letters. Using my Dremel I began to cut the foam away, leaving the letters untouched and carving to a depth of about 1/4".
When I was satisfied with the carving I used a polymer clear coat called Sculpt and Coat to seal the foam. When dry I used a light gray paint as the base coat and a darker gray that I sponged on after the base coat dried. This gives the appearance of stone and helped to accent the letters.
Here is the finished BEWARE sign.