Here is a rather manual process that for converting regular fonts to single line strokes.
1. Compose your text:
Select your text and an appropriate font for the cutters you wish to use.
Here is a good example of a font that is basically the same thickness throughout.
If we were to color code as an "inside cut", a 1/4" cutter ( red circle ) may not be able to cut the entire character out. So we will convert this from outlines to a single stroke for cutting as an online path.
2: convert it to outlines:
type> Create Outlines
3: Offset the paths
Select the paths and perform an offset: Object>Path>Offset Path
with preview enabled, experiment with negative values until you get a continuous path that is as close to the center as possible. Hit "Ok" this will create a new offset path
4: change colors, lock layers and trace
change its color so its visible. ( I gave this one a blue fill )
In the layer menu lock the layers you just made so you don't select and move them by mistake while tracing.
With the pen tool, ( and a new stroke color, red in my case and no fill ) trace the center line.
5: Make the stroke match the cutter
The edit the stroke weight by hitting the stroke button with the path selected. Make it the cutter diameter you wish to use ( you may need to change your stroke weight units in preferences to inches vs points )
Note the cap and corner settings have been changed to reflect the behavior of a rotating cutter.
6: Color code for Origin
Then its just a matter of changing the stroke color to grey and deleting the original font and offset elements.
you now have a single line letter to to cut.