Invalid Object Name #tablename at second call of #tablename sql server 2005 - sql-server

Question

When I execute the code :
declare #result int
exec recostcos #result
select #result
I get 'Msg 208, Level 16, State 0, Procedure RecostCOS, Line 138
Invalid object name '#rLB'.'
The strange thing is The first reference to #rLB did not produce any error but the second reference on line 138 produces the error above.
Please find below the code for recostcos :
set ANSI_NULLS ON
set QUOTED_IDENTIFIER ON
GO
ALTER proc [dbo].[RecostCOS](#result int output)
as
BEGIN TRY
BEGIN TRANSACTION
SET NOCOUNT ON
--variables
declare #itemName varchar(50)
declare #invoiceNo varchar(50)
declare #customerName varchar(100)
declare #recordedBy varchar(100)
declare #transDate datetime
declare #supCode varchar(50)
declare #decemQty1 decimal(18,6)
declare #decemQty2 decimal(18,6)
declare #decemQty3 decimal(18,6)
declare #recostQty decimal(18,6)
declare #count int
declare #innerCount int
declare #outputCode int
declare #outputCounter int
declare #recId int
declare #innerId int
create table #supcodes(supcode varchar(50),item_name varchar(50),
qty decimal(18,6),id int identity(1,1))
create table #recostList(invoice_no varchar(50),qty decimal(18,6), id int identity(1,1))
create table #rLB(invc_no varchar(50),qty decimal(18,6), id int identity(1,1))
--check for supplyCode needing reprocessing
select #count=count(*) from someTable where recosted=0;
if(#count<=0)
begin
commit
set #result=0
return #result
end
--
insert into #supcodes(supcode,item_name,qty)
select supply_code,item_name,quantity from someTable
where recosted=0
--recost each supply code needing recosting
while(#count>0)
begin
select top 1 #supCode=supcode,#itemName=item_name,#decemQty1=qty,#recId=id
from #supcodes
select #decemQty2=sum(current_qty) from someTable2 where item_name=#itemName
select #decemQty3=quantity from someTable3 where item_name=#itemName
if(#decemQty2 is null)
set #decemQty2=0
if(#decemQty3 is null)
set #decemQty3=0
--debug
if(#decemQty2<>#decemQty3)
begin
--check if there is a log of this error
select #count=count(*) from someTable4 where error_code=1 and
item_name=#itemName and supply_code=#supCode and resolved=0
if(#count<=0)
--error in stock quantities (this must be resolved b4 any recosting)
insert into someTable4(supply_code,item_name,error_code,error_source,error_detail)
values(#supCode,#itemName,1,'re-costing','Mismatch in stock quantities in stock state and supply codes tables')
end
else if(#decemQty1>#decemQty2)
begin
--check if there is a log of this error
select #count=count(*) from someTable4 where error_code=2 and
item_name=#itemName and supply_code=#supCode and resolved=0
--insufficient stock for recosting
if(#count<=0)
insert into someTable4(supply_code,item_name,error_code,error_source,error_detail)
values(#supCode,#itemName,2,'re-costing','insufficient stock for recosting')
end
else
begin
--recost cost of sales of item involved
--get list of invoices of item to be recosted
set #recostQty=#decemQty1
insert into #recostList(invoice_no,qty)
select invoice_no,quantity from someTable5
where supply_code=#supCode and item_name=#itemName
insert into #rLB(invc_no,qty) select invoice_no,qty from #recostList
--delete cost of sales relating to supcod and item in stock account
select #innerCount=count(*) from #recostList
while(#innerCount>0)
begin
select top 1 #invoiceNo=invoice_no,#decemQty2=qty,#innerId=id
from #recostList
delete someTable6 where description
like 'sales of '+ltrim(rtrim(convert(varchar(20),#decemQty2)))+'%'+
#itemName+'%'+#invoiceNo
delete someTable5 where supply_code=#supCode and item_name=#itemName
and quantity=#decemQty2
delete #recostList where id=#innerId
set #innerCount=#innerCount-1
end
--call costByFIFO to recost item
select #innerCount=count(*) from #rLB
set #outputCounter=#innerCount
while(#innerCount>0)
begin
select top 1 #invoiceNo=invc_no,#decemQty2=qty,#innerId=id
from #rLB
select #customerName=customer_name, #transDate=trans_date,
#recordedBy=recorded_by from someTable7 where invoice_no=#invoiceNo
exec #outputCode=costByFIFO #itemName,#invoiceNo,#customerName,
#decemQty2,#transDate,#recordedBy
--ensure each invoice is costed or reverse entire process
if(#outputCounter=0)
begin
set #outputCounter=#outputCounter-1
end
else
begin
set #result=3 --failed to cost all invoices involved
rollback
end
delete #rLB where id=#innerId
set #innerCount=#innerCount-1
end
--outputCounter must be 0 to indicate all invoices where costed
if(#outputCounter<>0)
begin
set #result=3 --failed to cost all invoices involved
rollback
end
else
begin
update someTable set recosted=1 where supply_code=#supCode
and item_name=#itemName
end
end
delete #supcodes where id=#recId
set #count=#count-1
end
SET NOCOUNT OFF
drop table #supcodes
drop table #recostList
drop table #rLB
set #result=0
COMMIT
END TRY
BEGIN CATCH
SELECT ERROR_NUMBER() ErrorNBR, ERROR_SEVERITY() Severity,
ERROR_LINE () ErrorLine, ERROR_MESSAGE() Msg
set #result=2 --unexpected error occured
ROLLBACK
END CATCH