2. It is suggested to check with the cloth manufacturer first: see if you can exchange the same price or more expensive cloth?
Your friend's factory has a lot of goods, and the cloth factory is a long-term cooperation. On the basis of not losing money, it is possible to agree to exchange the cloth for what your friend signed with the customer. In this case, there will be no delay for customers, no liability for breach of contract, and the loss will be much smaller.
If it is really impossible to negotiate with the cloth factory, see if the customer can negotiate to use the existing cloth, and your friend's factory will compensate some money.
About asking your friend for compensation in her factory: there are rules and regulations about compensation for losses caused by intentional or gross negligence in the factory, and only when she knows this system can she ask her for compensation in whole or in part.
If it is relevant, try to minimize the loss first, and then negotiate with the factory to solve it.
5. About not signing a labor contract: You can ask for double salary from the time you worked for one month until now, but this has nothing to do with whether your friend is liable for compensation, and you can't be exempted from liability for compensation just because you didn't sign a labor contract. Moreover, your friends have signatures and witnesses when choosing fabrics or signing bills, and it is not so easy to deny anything.