My friend showed up at a mutual friend's funeral wearing a red shirt and pants. I was shocked, and told her that if she had really cared about our friend she would have worn black. She told me that the reason she wore red is that it was our friend's favorite color. Who's right?
It's tough when a friend passes away and brings up so many different emotions. You are both dealing with a lot of different feelings right now, so it's understandable that you and your friend are having a bit of an argument.
However, your friend is correct. Our Etiquette Guide says that "Although it is still acceptable to wear black, choosing other colors and prints does not show disrespect as long as you keep the tones subdued."
While red might not be considered "subdued," your friend is trying to honor your mutual pal by her choice of top. Let her have this. It might not be the way you would have chose to honor your deceased friend, but there's nothing wrong with it.
Apologize to your friend and lean on each other now to help your feelings of grief. Remember that you both loved your friend, and this is a big thing in common that you can build on and use to strength your friendship.