Product Options

I got my products tables and product options working. The logic was each product would have a SKU and then options (color and sizes) would be added from a drop down, but those would be on the same SKU as the product. Now we have to have separate SKUs for each product option, so a blue chair will have a different SKU to a red chair, they will also have different prices.

My question is, what's the best way to handle this? Treat each product variation as a separate product? Or is there a way to be able to enter each product once and still use options drop down which change the SKU and price accordingly? That's seems like it will be very complicated. On the other hand, entering 9 products for a single chair that comes in 3 sizes and 3 colors is a lot of work too!

One other question: What's the best way to handle accessories? Certain products come with things like head rests. They only apply to specific products, but they have their own SKU and price. Should these just be handled like a product, e.g. entered through the admin as a separate product? And is there an easy way to tie them to their primary product?

Thanks.