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The Acura Legend proves that a luxury car can be fun to drive.

Two factors made the top-of-the-line Legend LS we test-drove a better- than-average performer: the very peppy 2.7-liter, 24-valve V-6 engine and the light-as-a-feather power steering, which makes wheel response very lively.

Honda`s Acura division was formed in 1986. The first Legend bowed on March 27 of that year, a 4-door sedan offered with either 5-speed manual transmission or automatic. Legend later expanded to coupes, then, last fall, the top-of-the-line LS sedan was introduced for the 1988 model year. Acura now boasts that sales of all models have topped the 100,000 annual rate.

What sets the LS apart is the more powerful 2.7-liter engine to replace the 2.5-liter V-6 that had been offered in Legend, plus the availability of antilock brakes, a driver`s side airbag housed in the steering wheel and a Bose sound system as standard.

With the 2.7, the LS certainly is quick; and with the responsive steering, it`s fun to drive and easily maneuverable. Legend is built on a 106.5-inch wheelbase and is 188 inches long, about the same dimensions as a Ford Taurus. There`s very good front and rear seat room and more than decent trunk space. Gas mileage is respectable at 19 m.p.g. city and 24 highway with 5-speed transmission, or 18 and 23 with automatic.

The drawback is price. Legend`s sticker in March, 1986, was $19,298 for the manual and $19,893 for the automatic. And that was high at the time. Today it`s $21,535 for manual and $22,305 for automatic, or $2,237 to $2,412 more. And that comparison applies only to the base Legend models. The LS sedan starts at $28,230 with 5-speed transmission, $29,000 with automatic.

The higher prices don`t come so much from dramatic technological innovation as from the fact that the value of the Japanese yen has skyrocketed against the dollar. What can you put in your hand for the extra $2,000?

Nice car. But $30,000?

The yen-dollar situation makes you pause and wonder how much the luxury Toyota Lexus and Nissan Infiniti might set you back when they bow in 1989 to compete with the Acura Legend.