Wireless Sensor Networks are often used for monitoring and control applications where sensor nodes collect data and send it to the sink. Direct transmission of data packets to the sink from nodes in the network causes increased communication costs in terms of energy, network lifetime and bandwidth utilization. In this context, this paper proposes Two Tier Cluster-based Data Aggregation (TTCDA) algorithm for the randomly distributed nodes in the network to minimize computation and communication cost. The TTCDA effectively considers the packet and data aggregation using additive and divisible aggregation functions at cluster head and sink. The aggregation functions are applied according to spatial and temporal correlation of packets and data generated by each node. It also prevents transmission of redundant data by improving energy consumption and bandwidth utilization as compared with state-of-the-art solution. The performance of the algorithm is validated using examples and simulations. Also, it is seen that packet aggregation in TTCDA is better for the bandwidth utilization as it reduces average energy consumption by 3.13 % as compared to data aggregation.